25 July 2017
Reporter: Mark Dugdale

Alibaba secures defamation verdict against counterfeiter

A pet-food vendor who sold counterfeit cat food via the Taobao marketplace has been found guilty of defamation in China, according to Alibaba Group.

The Shanghai court published its verdict on the civil lawsuit after a five-month legal battle. The defendant, whose surname is Yao, was ordered to pay RMB 120,000 (USD 17,800) in damages to Alibaba.

Yao’s arrest came as the result of a joint investigation between Alibaba and Mars, which owns the Royal Canin cat food brand.

In the lawsuit, which was filed in March, Alibaba said Yao had broken several of Taobao’s regulations prohibiting the sale of counterfeit merchandise, which caused reputational damage to the platform.

Alibaba sought RMB 2.76 million (USD 409,000) in damages to compensate for its direct and indirect economic losses, loss of goodwill and legal fees.

“Winning the first lawsuit [against Yao] has made Alibaba more confident in our crackdown on counterfeit merchants,” said the group’s chief platform governance officer Jessie Junfang Zheng. “We plan to put all the proceeds we receive [from lawsuits] to a special fund dedicated to protecting and compensating our consumers.”

The suit was the second anti-counterfeiting civil action lodged by Alibaba this year, following a case against two fake Swarovski watch sellers on Taobao.

Alibaba sued the two vendors for selling alleged knock-offs of Swarovski watches, seeking RMB 1.4 million (USD 207,000) in damages for contract and goodwill violations.

In March, Alibaba chairman Jack Ma called for China’s counterfeit laws and penalties to be strengthened, after revealing that among the 4,495 suspected counterfeit sellers (with annual sales for each topping RMB 50,000 (USD 7,400)) detected in 2016, only 30 were indicted by Chinese law enforcement authorities.

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