Claims by Brand Owners Against Alibaba Defendants are Reasserted in S.D.N.Y.

A group of brand owners has filed another complaint against eleven Alibaba and Taobao entities for claims including direct and contributory trademark counterfeiting and violations of the RICO statute. At issue is when and to what extent a service provider can be held liable for alleged trademark counterfeiting taking place on an online platform.

Alibaba.com reportedly connects exporters primarily based in China with global buyers, while Taobao.com is said to be China’s largest consumer-to-consumer online shopping platform. The Complaint includes allegations that merchants designated as trusted on the defendants’ sites are selling counterfeit goods or offering materials for use in manufacturing or packaging counterfeit goods; that the Alibaba defendants are offering payment processing, marketing, loan financing, escrow, and cloud computing services to such merchants; and that the Alibaba defendants and others have formed an enterprise within the meaning of the RICO statute.

The issue of service provider liability for alleged trademark counterfeiting is also being litigated in the Ninth Circuit in Chloe SAS et. al. v. Sawabeh Inform. Servs. et. al., (Appeal No. 13-56912). In that case, Sawabeh Information Services and Tradekey (PVT) Ltd. have appealed decisions including an October 8, 2013 partial summary judgment order finding liability for contributory trademark counterfeiting among other claims.

Gibbons P.C. will continue to report on developments in trademark counterfeiting cases, including activity in the Alibaba and Chloe cases noted herein.

Wendy R. Stein is Counsel to the Gibbons Intellectual Property Department.
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