Alibaba Group Holding alleged on Thursday that an intellectual property (“IP”) firm has taken to filing unsubstantiated complaints against vendors on its e-commerce platforms. Hangzhou Wangle Technology – a native Chinese IP agency – which is hired by businesses to help manage their IP, including their copyright, trademark, and patent rights – is, according to Alibaba, abusing of its system for reporting IP infringement. As a result, the Chinese e-commerce giant has said it will boycott this firm and its complaints.
Alibaba said on Thursday that claims by IP agencies hurt more than a million merchants on the Taobao platform in 2016, and its decision to not process claims from Hangzhou Wangwei was a result of an investigation that showed the firm had withdrawn over 60 percent of its complaints that since 2015 after counter-appeals from merchants.
The move comes on the heels of an array of damning developments for Alibaba, including lawsuits from Louis Vuitton’s parent company, LVMH Moët Hennessy Louis Vuitton, and rival conglomerate, Kering. According to the suit that Gucci’s parent company, Kering, filed against Alibaba in May 2015 (its second suit against the Chinese giant): “The Alibaba defendants facilitate and encourage the sale of an enormous number of counterfeit products through their self-described ‘ecosystem,’ which provides manufacturers, sellers, and buyers of counterfeit goods with a marketplace for such goods, and provides online marketing, credit card processing, financing, and shipping services that effectuate the sale of the counterfeit products.”
LVMH filed a similar suit centering on the willful and knowing sale of counterfeit goods by Alibaba on its platforms, paired with its users’ abuse of the comment/rating section. That matter was settled out of court.
Thereafter, Alibaba caused controversy when it was granted inclusion in the International AntiCounterfeiting Coalition, a non-profit organization devoted solely to combating product counterfeiting and piracy. In response to its membership, a number of existing members, such as Gucci, Tiffany & Co., and Michael Kors, withdrew from the organization, and board members received an anonymous email threatening a mass defection unless Alibaba was pushed out; within a week of the Chinese company’s inclusion, its membership was suspended by the group.
And still yet, Alibaba’s TaoBao platform was highlighted in the Office of the United States Trade Representative's 2016 “Special 301” Out-of-Cycle Review of Notorious Markets report, an annual list that details which entities are most egregiously abusing the IP rights of others' on a worldwide basis.
An article from Alibaba's news site, Alizila, "Alibaba said it will continue to identify other possible offenders in the IPR claims area and look to support and protect the interests of legitimate merchants."