Fashion brands sue Alibaba over “counterfeit goods”

Fashion brands sue Alibaba over “counterfeit goods”

Paris-based Kering Group, the luxury goods company whose famous brands include Gucci, Yves Saint Laurent and Puma, has filed a lawsuit in Manhattan federal court accusing Alibaba of allowing counterfeit goods to be sold on its e-commerce website. The lawsuit accuses Alibaba of not only allowing this activity to happen, but also playing a part in the manufacturing and sale of the goods.

The Kering Group, which is seeking damages and an injunction for alleged trademark violations,  told the BBC that the lawsuit is part of its “ongoing global effort to maintain its customers’ trust in its genuine products and to continue to develop the creative works and talents in its brands”.

This is the second time that the Kering Group has filed a lawsuit against Alibaba in connection with alleged counterfeit goods. The previous lawsuit was filed in July – and withdrawn in the same month so the companies could try to resolve their differences outside the courts. Presumably they failed to reach an agreement.

The new lawsuit, filed on Friday (16 May), alleges that Alibaba and its merchants “provide the marketplace advertising and other essential services necessary for counterfeiters to sell their counterfeit products to customers in the United States.”

Furthermore, the lawsuit alleges that Alibaba has allowed sales to continue even when it had been informed that merchants were selling counterfeit products.

Alibaba spokesperson Bob Christie said: “We believe this complaint has no basis and we will fight it vigorously.”

Christie also said that Alibaba “works in partnership with numerous brands to help them protect their intellectual property”.

Earlier today (19 May), Alibaba’s founder and executive chairman Jack Ma offered a personal response to the Kering lawsuit, telling reporters in Seoul: “”I think it is regrettable that that company sued us. It would have been better had they tried to find a solution through cooperation with us.”

Alibaba claimed in late 2014 that it had spent more than $160 million (1 billion yuan) combating counterfeit goods and improving customer protection since the start of 2013. The company knows that it will have to address this issue – and be seen to be addressing this issue – if it is to attract U.S. customers, investors and retail partners.

The timing of the lawsuit could also be awkward for Alibaba. In his comments to the reporters in Seoul, Ma confirmed media reports that Alibaba is in talks about an electronic payment system with Apple – a company which takes brand protection very seriously indeed.

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