Alibaba successfully sues counterfeiters for damages

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A court in Shanghai has ruled in favor of Alibaba in a lawsuit against an online merchant who had been selling counterfeit pet food on the internet giant's trading platforms. The counterfeiters must now pay civil damages in the amount of approximately 15,000 euros.

The successful outcome of the trial is the culmination of joint investigations conducted by Alibaba and Mars Inc., the legal owner of the cat food brand Royal Canin, whose rights had been violated by the operations of the counterfeiters.

Alibaba’s main contention during the trial, which began in early March, was that the suspects violated the terms of use of Alibaba’s trading site Taobao and had damaged its image by using it to sell counterfeits. At the beginning of the trial, the Chinese online giant had therefore claimed about 350,000 euros (about 2.7 million Chinese yuan) in damages as compensation for direct and indirect financial losses.

Alibaba considers the court verdict as an important success in its fight against counterfeiting (we reported on recent results and activities). “Winning the first lawsuit has made Alibaba more confident in our crackdown on counterfeit merchants,” said Jessie Zheng, Chief Platform Governance Officer at Alibaba. “We plan to put all the proceeds we receive [from lawsuits] to a special fund dedicated to protecting and compensating our consumers.”

Three other lawsuits initiated by Alibaba are currently also underway: at the beginning of the year, the company initiated civil proceedings against two dealers of counterfeit Swarovski watches and filed a lawsuit against a Taobao user who had sold illegal counterfeits of a popular Chinese brand of liquor.

Despite the recent success, some industry experts are still critical of Alibaba’s anti-piracy measures. The few activities to sue manufacturers of counterfeits is only a drop in the bucket, said Rania Sedhom from the law firm Sedhom Law Group. “It is a step forward, it is helpful. But unless you prohibit the sales from going through, you aren’t going to combat fakes in a meaningful way.”

Another industry expert who wished to remain anonymous told specialist magazine World Trademark Review: “I don’t think brands are any more optimistic about Alibaba. Recently Jack Ma [founder and CEO of Alibaba] said that they are a leader in anti-counterfeiting but it’s a lot of window dressing. I think what they are doing is important and is helpful, but it isn’t making a huge difference in terms of what we are seeing overall on Alibaba platforms.”

Sources: Alizila, World Trademark Review

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