France-based Kering luxury brands sue Alibaba over sale of counterfeit products

Chinese e-commerce giant Alibaba Group Holding was sued by a group of luxury goods makers over the sale of counterfeit products via the company's websites throughout the world, Reuters reported.

The lawsuit, filed in Manhattan federal court by Paris-based Kering SA brands including Gucci and Yves Saint Laurent, alleges that Alibaba had been aware of the sale of counterfeit products on its websites. The complaint also said Alibaba had conspired to manufacture, offer for sale and traffic in counterfeit products bearing their trademarks without their permission.

The brands are seeking damages and an injunction for alleged violations of trademark and racketeering laws.

Kering brands had sued Alibaba in July 2014 over the same issue, but the case was withdrawn in the same month as they worked toward a resolution with Alibaba, according to court records.

The company has been facing complaints about the listing of counterfeit products on its websites for a long time. In order to build reputation in the international market, Alibaba removed 90 million listings on its websites that may have breached intellectual-property rights ahead of its initial public offering in September 2014 in the US.

It also penalised 131,000 sellers, as of 30 September 2014, and its cooperation with Chinese law enforcement agencies in more than 1,000 counterfeiting cases in 2014 led to the arrests of 400 suspects.

The US Trade Representative removed Alibaba's online marketplace Taobao from its list of "notorious markets" in 2012 in light of the progress made.

The company's current intellectual property protection policy, detailed on Alibaba.com, says it respects the intellectual property rights of others and it will not allow unauthorised use of another party's materials and trademarks on its websites.

Listing of counterfeits, non-licensed replicas, or unauthorised products such as counterfeit designer garment, watches, handbags, sunglasses or other accessories is strictly prohibited on the site.

"No products can be sold on the Site without the explicit permission from the intellectual property right holder. Branded products are permitted to be displayed and sold on the Site if a certificate of authorization has been issued by the brand owner," the company says.