Dive Brief:

• French luxury goods company Louis Vuitton, owned by LVMH, is suing three people convicted of selling counterfeit versions of Louis Vuitton clothing, shoes and handbags on Alibaba Group Holding Ltd's Taobao marketplace.

• The suit was filed in a district court in Beijing by Louis Vuitton, according to the court's website.

• The suit asks the defendants “to stop infringing on its trademark and is seeking compensation of economic losses of 250,000 yuan ($37,900)", according to the court statement.

Dive Insight:

Partnering with Alibaba’s Taobao or JD.com has merged as essential for American and European retailers interested in selling to China’s vast middle class. But many retailers and consumer-product companies have had to become more savvy about battling counterfeiters and heavy discounts. 

U.S. Trade Representative Michael Froman last month announced the findings of the Special 301 Out-of-Cycle Review of Notorious Markets for 2015, highlighting companies that are “engaging in and facilitating substantial copyright piracy and trademark counterfeiting,” including fake goods and pirated content.

Although the report didn’t name Alibaba on its blacklist, it did single out the Chinese conglomerate and its online marketplaces Tmall and Taobao as needing to work harder to excise counterfeits. Brands continue to report that Alibaba Group’s enforcement program is too slow, difficult to use, and lacks transparency, the report said. “Brand owners continue to report Alibaba platforms, particularly Taobao, are used to sell large quantities of counterfeit goods,” according to the report. 

The problem continues even as Alibaba has worked to increase the number of American  and European brands that sell on its marketplaces. Indeed, Alibaba founder Jack Ma has called his company “the e-commerce enabler.”

“We do not buy and sell like Amazon because we think that SMB’s already know how to sell easily and effectively,” Ma said last year. “We help others do e-commerce, find customers, help with payment and help with logistics.”

When it comes to counterfeit goods, Alibaba told Reuters in an email last month that it’s doing its best. "Counterfeiting is an issue all global e-commerce companies face, and we are doing all we can to address and fight it," an Alibaba spokesman said in an emailed statement to Reuters.