Alibaba Takedowns and a Lawsuit

Alibaba takedowns are easy, so why the big lawsuit?

We have many times written about our near 100% success rate at getting counterfeit products removed from the big name Chinese websites like Alibaba. See, for instance, Register Your Trademarks, Copyrights and Patents in China Because Alibaba is Getting Serious About IP:

Alibaba International has a formal procedure for requesting and securing the removal of links to material on its website that infringe another company’s IP rights. To secure the removal of such material, one must follow Alibaba’s procedure to the letter. Among other things the process requires documentation proving the IP owner’s existence and rights to the IP in question. If everything goes smoothly, it takes Alibaba a few weeks to remove an infringing link. We have not once failed to secure the removal from Alibaba of product that violates our client’s trademark rights when we have sought that removal from Alibaba.

Less than a month ago, in Getting Counterfeit Products Off China Websites: It’s Possible, [link no longer exists] one of my law firm’s international IP litigators bragged about our China lawyers’ success in getting counterfeits taken down from Chinese websites:

A couple of our China lawyers nearly every day oversee requests to Chinese websites to take down counterfeit products. The success rate on getting these products removed within a week or so is North of 95%.

So when I first heard about Luxury Brands’ recent lawsuit against Alibaba for alleged laxness in allowing counterfeits on its website, my first thought was to wonder why. But after reading more about that case, I no longer wonder. That lawsuit does not really involve allegations regarding Alibaba’s failing to take down counterfeits; it instead focuses on Alibaba allowing counterfeits to show up on the site in the first place. 
In 5 Things to Know About Luxury Brands’ Lawsuit Against Alibaba the Wall Street Journal nicely encapsulates the case as per the below:

1. The Lawsuit Covers a Wide Range of Merchandise. The lawsuit describes a broad array of counterfeit luxury goods, including fake Gucci “diaper bag totes” sold on Alibaba.com for $2-$5 apiece.

2. Defendants Named in the Lawsuit Include Alibaba’s Payment Affiliate. The lawsuit names Alibaba.com, Taoboa.com and also Alipay.com, alleging that Alipay has “actual knowledge that it is providing payment processing services to merchants selling Counterfeit Products.”

3. The Lawsuit Cites Fakes Exported Out of China on Alibaba’s Platforms.  Investigators bought counterfeit goods through AliExpress.com that were shipped to New York. The lawsuit states that typing “Gucci” into AliExpress.com’s search engine, causes it to suggest keywords such as “cucci,” “guchi bags,” and similar misspellings.

4. The Lawsuit Alleges Alibaba Is Too Lenient on Counterfeiters.  The lawsuit “criticizes Alibaba’s ‘three strikes’ policy on Alibaba.com and AliExpress.com, in which merchants receive first a warning, then a removal of all product listings and finally a ban from the site on the third strike.”

5. Alibaba Says Lawsuit is “Wasteful” and Says it Will Fight. Alibaba says it is doing what it can to prevent counterfeits, including spending about $160 million in 2013 and 2104 to fight against intellectual property infringement and to “enhance consumer protection.”

So how do we reconcile what we say about how easy it is to get Alibaba and others to remove infringing products and this lawsuit? Easy. We write about what we do once counterfeits are spotted and how agreeable Alibaba and others are in terms of getting those counterfeits taken down. We have never written about whether Alibaba and others are doing enough to prevent the counterfeits from showing up on their site in the first place, nor even about how vigilant these websites are in making sure the bad actors do not show up again on their sites. This lawsuit likely will tell us more about those sorts of things.
Pending resolution of this big case, our China IP lawyers will just keep successfully handling China website takedown actions. . . .

One response to “Alibaba Takedowns and a Lawsuit”

  1. Alibaba Group operates under three portals: Tmall, e-retailer, Taobao, e-retailer similar to ebay and Alibaba.com, where Chinese factories showcase themselves. The Group runs a very tight ship on Tmall in terms of ensuring only the brand owner/IP owners can sell on Tmall. It seems that they have not down nothing or not enough to police Taobao and Alibaba.com in this regards. Lawsuit like this may have a longer impact in China. I hope Alibaba responds to your requests faster from now on.

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