Counterfeits? Alibaba’s Second Annual Report Touts Significant Improvements

Nestled in between the annual conferences of two of the most esteemed intellectual property organizations in the world, the International Trademark Association and the International Anti-Counterfeiting Coalition (“IACC”), was an interesting event. Alibaba – which has been working overtime to address the influx of counterfeit goods that tend to find homes on the market’s largest e-commerce marketplaces – staged  an  Intellectual Property Rights Protection Summit in Seattle.

In addition to welcoming brands, government representatives, law enforcement officials, and various other stakeholders, Alibaba used Friday’s Summit as an opportunity to release its second annual IP Protection Program report, in which the Chinese e-commerce giant outlines its efforts to fight counterfeit goods on its most problematic platform, the TaoBao marketplace.

The report also spotlights Alibaba’s various offline investigations and legal actions in connection with the manufacturing and sale of counterfeit goods, those that bear an identical replication of another’s trademark on the same types of goods for which the rights holder has federal trademark registrations.

According to the report, Alibaba claims that compared to last year, “More rights holders are working with Alibaba and filing fewer complaints [about infringements and counterfeit goods on the TaoBao platform].” In particular, Alibaba points to a 17 percent increase in the number of registered accounts on its IP Protection Program Platform, a program aimed at “facilitating intellectual property protection in a cooperative manner [with rights holders] over various websites under the Alibaba Group.”

A rather striking stat:  The number of notice and takedown requests submitted by rights holders declined by 42 percent compared to the numbers cited in the 2016 report.

In what might be a subtle jab at Amazon, which has come under fire for not being “proactive” enough in its enforcement efforts, the Jack Ma-launched platform emphasized in the report that “27 times more listings were proactively removed than [the number of filings that were] reactively taken down in response to requests from rights holders.” Alibaba notes that 97 percent of all proactive takedowns – i.e., takedowns of listings for infringing goods by Alibaba before it received a takedown request from the rights holding brand – were removed before a single sale occurred.

In addition to shutting down 240,000 different TaoBao accounts, Alibaba boasts its work in “supporting law enforcement investigations in 23 Chinese provinces to crack down on the sale of fake goods,” and points to the 12 legal proceedings it initiated in 2017 in Chinese courts against counterfeiters, “the first legal actions brought in China by an e-commerce company against infringing sellers on its platform.”

While at least some legal teams and brand representatives that TFL spoke with are still very much on the fence about Alibaba’s commitment and efforts to cut down the amount of fakes that are available on TaoBao, which is China’s most heavily-trafficked marketplace platform, the giant continues to find allies among brands, as indicated in its growing list of IP partners and those willing to speak out on its behalf.

For instance, as Frederick Mostert, president of the Luxury Law Alliance and a visiting professor at King’s College Law School, London, said of Alibaba this week, it “is setting cutting-edge benchmarks and developing a new gold standard for the use of technology.”

Peter Ratcliffe, who heads the Intellectual Property Crime Unit at City of London Police, also spoke positively of the Chinese giant, saying, “You can’t investigate IP crimes by yourself. Alibaba has become a very important partner to us.”

As for the fashion industry, the growing list of big-name brands and conglomerates, which range from LVMH and Kering to adidas, Burberry, Valentino, and Ralph Lauren, that have joined with Alibaba in an effort to collaboratively fight fakes, seems significant, particularly given how strong the stance of many brands is towards Alibaba's American counterpart, Amazon.

In short: This is one space (on the web) that is absolutely worth watching.

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