Kering’s luxury brands have won an early victory in court in their fight against Chinese retailer, Alibaba over the claim that Alibaba sells fake goods on its website.
Back in May, Kering luxury brands including Gucci, Yves Saint Laurent, and Balenciaga, sued Alibaba in New York, claiming that trademark infringement and the sell of counterfeit goods on the Chinese retailer’s website.
This past week, these brands were granted their request for a temporary restraining order against several Alibaba vendors named in the suit. This is a huge win for these luxury brands because it means that the vendors must immediately cease the sale and distribution of the counterfeit goods on the Alibaba website.
On Friday, Alibaba Group Holding, an online retailer based in China, was sued in Manhattan federal court, by Kering luxury brands, including Gucci and Yves Saint Laurent. The brands argue that the retailer knowingly allowed counterfeiters to sell their products to consumers.
The Kering brands are alleging trademark infringement and racketeering and are seeking both monetary damages as well as an injunction preventing the future sale of these counterfeit products.
Alibaba Headquarters: By Thomas Lombard via Wikimedia Commons
In their lawsuit, the brands claim that Alibaba conspired with the counterfeiters to manufacture, sell and distribute products that infringe on the plaintiffs’ trademarks that confuse the consumer and lead the consumer to believe that the products are genuine luxury items.
This is the second time that Alibaba has been sued by Kering brands over counterfeit products. The brands filed a lawsuit in July of 2014, but withdrew it with the ability to refile if the two sides couldn’t come to a resolution of their issues. And, it seems they haven’t reached a resolution.
Kering subsidiaries, Tiffany & Co., Gucci, Bottega Veneta, and Yves Saint Laurent, have been attempting to freeze the assets of supposed counterfeiters in Chinese banks. And, while two lower courts agreed with the fashion houses, last week, the 2nd Circuit Court of Appeals in New York remanded these decisions back to the lower court to determine whether U.S. judicial system has the authority to freeze accounts in overseas banks.
Brian Solis via flickr.com
This litigation began when the Kering companies sued several Chinese companies, alleging the sale of counterfeit products. The fashion houses claim that the counterfeiters’ assets in accounts with the Bank of China, China Merchants Bank Co. Ltd. and the Industrial and Commercial Bank of China Ltd. contain profits derived from selling counterfeit products, and thus the accounts should be frozen.
Kering SA, one of the largest luxury goods conglomerates, is teaming up with China’s largest e-commerce retailer, Alibaba, to combat against the sales of counterfeit products on the e-commerce site. This collaboration comes after Kering dropped its lawsuit against Alibaba, which claimed trademark infringement and that Alibaba made it possible for fakes to be sold worldwide. The lawsuit claimed that fakes of Kering brands, including Balenciaga and Yves Saint Laurent, are often sold on the e-commerce platforms of Alibaba.
In an attempt to crack down on the proliferation of fakes being sold on its site, Alibaba has banned listings that infringe on trademark and copyright rights and has forced sellers to make deposits and use a ratings system. However, it seems the sell of counterfeit products continues, and Kering and Alibaba have decided to work together to combat the counterfeit products sold on the site. What sort of procedures that will be implemented to fight the sale of fakes has yet to be revealed.