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March, 2018

Alibaba advocates harsher penalties for counterfeiters

Original article: Sina

Alibaba has renewed its publicity campaign against counterfeiting after a brief hiatus that followed Taobao being named as a "notorious market" once again by the U.S. Trade Representative. The e-commerce giant believes that its own efforts to remove infringing listings and inform the authorities about counterfeiting activity have been substantial. Yet counterfeiting persists in China because offenders are not usually punished severely, Alibaba says. 

Analysis:

Alibaba was distraught when Taobao was named to the Notorious Markets blacklist for the second year in a row. The Chinese e-commerce giant felt that U.S. regulators unfairly targeted Taobao, given Alibaba's visible - and by its own accounts substantive - anti-counterfeiting efforts.  


Now the e-commerce juggernaut is shifting gears in a push for legal reform. If counterfeiting becomes a more serious offense in China, casual IP thieves will be deterred, Alibaba reckons. Of course, counterfeiting would remain profitable, but fewer people would be willing to take the risk.  


Thanks to its abundance of data, Alibaba has proof that the Chinese legal system is punishing counterfeiters lightly. In 2017, Alibaba says that it flagged 5,436 cases of suspected counterfeits with sales exceeding RMB 50,000. 1,940 cases were referred to law enforcement authorities. 740 were deemed criminal cases. However, to date, there have been just 63 criminal convictions. 104 of 129 defendants (81%) were sentenced to probation, Alibaba says.  


Ye Zhifei, a Director of Intellectual Property Protection at Alibaba, told Sina that authorities in a "western province" busted a large-scale fake spices operation last year. Police discovered that two of the suspects were repeat offenders, lured by the profitability of the operation. Chinese public security had detained the two suspects pending criminal trial in both 2006 and 2011 for similar offenses. 


Interestingly, Alibaba's data show that the majority of Chinese counterfeiters are young people aiming to get rich quickly. In 2017, 83% of the suspects detained for the manufacture and sale of counterfeit goods were in their 20s and 30s, Alibaba says. 


Gao Yandong, a professor at Zhejiang University's Guanghua Law School, told Sina that China should diversify the legal criteria for punishing counterfeiters. Revised legislation could take into account other factors besides the monetary value of the infringing goods, he said. 


Further, Gao urges greater public education about counterfeiting's wrongness. He has a good point. If the Chinese public see counterfeiting as anti-social behavior - similar to other serious criminal activity - fewer people will be willing to engage in it. But as long as most Chinese people believe that trademark infringement is harmless, counterfeiting will proliferate. 

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