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October, 2017

Alibaba steps up efforts to remove Taobao from Notorious Markets blacklist

Original article: Regulations.gov

Alibaba has been on a long-running public-relations campaign to demonstrate its commitment to intellectual property protection. The endgame for the Hangzhou-based internet giant is to get its Taobao marketplace removed from the U.S.'s Notorious Markets blacklist. Taobao returned to the list in December 2016 after a four-year hiatus. 


In a letter submitted to the U.S. Trade Representative October 2, Alibaba's Head of International Government Affairs Eric Pelletier highlighted the company's recent brand protection efforts. Pelletier noted that takedown requests fell 25% from September 2016-August 2017 compared to the same period a year earlier, even as registered accounts in the company's IP protection system rose 11%. During the 9/2016-8/2017 period, Taobao "proactively took down 28 times more listings than the number of listings it removed reactively in response to complaints from rights holders," Pelletier noted. 


The letter also points out Alibaba's cooperation with law enforcement in China. From September 2016 to August 2017, Alibaba provided the police with 1,573 leads. As a result of those leads, Chinese authorities arrested 1,009 suspects and shut down 982 manufacturing and distribution locations.


Additionally, Pelletier describes Alibaba's initiation of civil litigation in China against counterfeiters: a lawsuit against a seller infringing on Mars Inc's trademarks and two sellers of fake Swarovski watches. "To our knowledge, these lawsuits are the first legal actions brought in China by an e-commerce company against infringing sellers operating on its platform," he wrote. 

Analysis:

Alibaba appears to be more engaged than in years past in the battle against counterfeiters. Even skeptics of the company's commitment to fighting fakes have to admit that it's putting on a sterling performance - at the very least. Chief executive officer Jack Ma has been careful of late to not publicly laud counterfeiters' manufacturing acumen, as he did last year in Hangzhou. 


Instead, Ma has done an about-face, calling on Chinese authorities to punish counterfeiters with stiff fines and jail time. In an open letter published on the Sina news portal in March, Ma said: "The existing laws are lagging, failing to impose actual threats on the behavior of counterfeiters and leave far too much room for cheating...For example, if the penalty for even one fake product manufactured or sold was a seven-day prison sentence, the world would look very different." 


The Alibaba chief has a point. "IP rights remain hard to protect because of the low fines for infringements," Zhao Zhanling, a scholar at China University of Political Science and Law, told the state-run China Daily in a September interview. 


According to the China Daily report, only a fraction of the people involved in the 4,495 counterfeiting cases Alibaba found last year in which the volume of fake goods surpassed the threshold for criminal prosecution were punished appropriately. Most of the offenders received suspended sentences or light fines. 


Meanwhile, an October report in World Trademark Review suggests Alibaba may have reason for optimism about Taobao's chances of omission from the Notorious Markets blacklist. Just one public comment - from the Autocare Association - recommends Alibaba marketplaces (AliExpress, Alibaba and Taobao) to be placed on the list. In contrast, the American Apparel & Footwear Association, an influential organization and previously a harsh critic of Alibaba, commends the e-commerce juggernaut for its recent anti-counterfeiting initiatives. 

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