Alibaba fighting 'false' intellectual property claims

Dive Brief:

Alibaba announced a boycott of a Chinese intellectual property enforcement agency that the e-commerce giant says is “abusing our IPR [intellectual property rights] notice-takedown system with fraudulent and malicious complaints,” a spokesperson told Retail Dive.
Alibaba singled out Hangzhou Wangwei Technology Ltd. among “numerous agencies” as an abuser of its IPR reporting system and said it would no longer process IPR claims lodged by the agency across its platforms. Alibaba also urged anyone engaging the agency — including brands frustrated with the sale of counterfeit goods on Alibaba’s marketplaces — to stop using its services, the spokesperson added.
Hangzhou Wangwei, in a statement on its website cited by The Wall Street Journal, denied the claims and said that it works directly with brands in the “strict enforcement of legal and compliant intellectual property protection work.” While that statement didn’t explicitly mention Alibaba, a Hangzhou Wangwei spokesperson told the Journal that it’s a response to Alibaba’s assertions.

Dive Insight:

Earlier this month Alibaba announced the launch of its Big Data Anti-Counterfeiting Alliance, an initiative to foster industry collaboration and promote the use of analytics and technology in the global fight against counterfeiters. Now it’s clear that its big data operations will also serve to weed out what Alibaba says are “bad actors” in the turbulent e-commerce environment, where brands are increasingly up against sales of knockoffs of their goods.

“The purpose of the IPR system is to protect innovation, yet deliberately abusing the system for malicious or false complaints is unlawful behavior infringing the principles of integrity and justice and will cripple innovation, acting like sand in the gears,” Alibaba Group lawyer Chen Wenxuan said on the company’s blog Wednesday.

In that post, Alibaba also says that it has evidence of Hangzhou Wangwei working with distributors to lodge complaints against competitors in an effort block some sellers and drive customers to favored sellers or to buy goods at higher prices. Alibaba said it would “not tolerate price-fixing on its platforms” and said it may pursue legal action if Hangzhou Wangwei continues with what it calls “malicious complaints against legitimate merchants.”

Brands have joined Alibaba’s Big Data Anti-Counterfeiting Alliance, but while they may have nothing to lose in doing so, it’s not clear whether there's widespread support for Alibaba’s self-policing efforts. Last year, several international trade groups sent a joint letter to Alibaba complaining that it was not doing enough to curb the volume of counterfeits products appearing on its platforms and later lobbied the USTR to return Alibaba to the Notorious Markets List. The USTR did return the company's Taobao marketplace to that list in December.