05 January 2017
Reporter: Barney Dixon

Alibaba takes Taobao counterfeiter to court

Alibaba Group has sued two vendors that used the Taobao marketplace to sell counterfeit Swarovski watches, claiming RMB 1.4 million ($203,000) in damages for contract and goodwill violations.

The lawsuit, filed in the Shenzhen Longgang District People’s Court, is the first ever case of an ecommerce platform owner bringing a counterfeiter to court in China.

According to Alibaba, the Shenzhen Luohu District police raided the seller last year and uncovered more than 125 counterfeit Swarovski watches with an overall value of nearly RMB 2 million ($290,000).

Alibaba has said that legal action won’t stop there, as it has already compiled a list of counterfeiters that it will take similar legal action against.

Zheng Junfang, chief platform governance officer at Alibaba, said: “We want to mete out to counterfeiters the punishment they deserve in order to protect brand owners.”

“We will bring the full force of the law to bear on these counterfeiters so as to deter others from engaging in this crime, wherever they are.”

In December, Alibaba sued seeking RMB 2.16 million ($310,000), after Shatui allegedly allowed merchants to hire writers to produce false reviews on the platform, raising the sellers’ rankings.

Last year also saw Operation Cloud Sword, a joint effort between Alibaba and Chinese law enforcement, which exposed and took down 417 counterfeit production rackets.

Operation Cloud Sword, which ran from April to July 2016, utilised Alibaba technology, complex algorithms, machine learning, optical character recognition and mapping to generate leads on the Taobao marketplace to help law enforcement determine the source of a fake product.

Chinese law enforcement arrested 332 suspects and unveiled infringement of more than 131 brands, including Starbucks, Converse, Adidas, Nike, Mobil, Samsung and Philips.

Matthew Bassiur, head of global intellectual property enforcement at Alibaba, said: “We take a holistic and technology-driven approach to IP rights enforcement.”

“Big data analytics enhance our ability to identify and pursue counterfeiters, and make it increasingly difficult for these illicit sellers to hide in the shadows.”

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