A group of luxury brands has filed a lawsuit against Alibaba, claiming that the China-based online retail giant knowingly helped counterfeiters to sell fake products through its website.
The luxury brands that filed the lawsuit included Gucci and Yves Saint Laurent, along with several others that are owned by Paris-based Kering. The brands are seeking for damages along with an injunction against Alibaba for violating laws on racketeering and trademarks.
The lawsuit claims that Alibaba conspired with counterfeiters in manufacturing, selling and shipping the fake products, which bear trademarks held by the Kering-owned companies without consent.
Alibaba spokesman Bob Christie said that the company has a continuing partnership with many brands to assist them in protecting their intellectual property rights, with Alibaba holding a strong track record in the endeavor.
"Unfortunately, Kering Group has chosen the path of wasteful litigation instead of the path of constructive cooperation. We believe this complaint has no basis and we will fight it vigorously," Christie stated.
Concerns connected to counterfeit products being sold on the platforms of Alibaba, including the online marketplace Taobao, has tarnished its image for several years. However in 2012, the United States Trade Representative de-listed Taobao from the list of "notorious markets" due to the progress that was made in suppressing counterfeit products.
The lawsuit is the second time within a year that Kering-owned brands have sued Alibaba over selling counterfeit products. In July 2015, the brands filed a similar lawsuit against Alibaba, but withdrew it in the same month as the companies looked to resolve the matter with Alibaba.
According to the lawsuit, Alibaba and its units provide counterfeiters with advertising and other services that they need to be able to sell fake products to customers located in the United States.
One of the examples cited by the lawsuit concerned a counterfeit Gucci bag that was being sold for $2 to $5 per piece by a merchant in China that was looking for buyers who would pick up at least 2,000 pieces. The authentic version of the said bag has a retail price of $795, the lawsuit stated.
The lawsuit added that Alibaba allowed the selling of counterfeit products even when the company had been told that there were fake products being sold on its platforms.
The Kering-owned brands are seeking for damages for the counterfeit products that passed through Alibaba, along with a court order for the retail giant to stop selling counterfeit products related to the brands.
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