Alibaba and IP Protection

1. Alibaba and IP Protection In April 2019, President Trump signed a Memorandum on Combating Trafficking in Counterfeit and Pirated Goods to protect intellectual property rights holders, consumers and others, “including those that are imported through online third- party marketplaces and other third-party intermediaries.” Alibaba is one of those online third-parties. Founded in 1999, Alibaba is China’s biggest eCommerce marketplace and a global leader in e-commerce. Currently, the group has five platforms: AliExpress and Alibaba which have a global reach, as well as Taobao, Tmall, and 1688 serving Chinese consumers. Together they have millions of users, merchants and businesses. Alibaba and counterfeit issues Alibaba has been having significant issues with fake goods. Back in 2015, Kering, a luxury brands group that includes Gucci, Yves Saint Laurent, and other brands, filed a suit, alleging that Alibaba "knowingly encourage, assist, and profit from the sale of counterfeits on their online platforms...[and] make it possible for an army of counterfeiters to sell their illegal wares throughout the world," according to a copy of the filing. In 2016 it was called a “dangerous and damaging adversary” by Michael Kors’ legal counsel following its admittance to the U.S.-based IACC, the International Anti-Counterfeiting Coalition. Following member protests, the IACC announced the suspension of Alibaba’s membership. Protecting IP

2. To face those issues and protect intellectual property, Alibaba’s founder, Jack Ma, has pledged to crack down on fake goods. The group has since invested in several anti-counterfeit initiatives. In response to the April memorandum, Alibaba issued a statement, “We welcome this new initiative and the attention it brings to the global fight against counterfeiting.” In early April, Alibaba was offered an award at the Luxury Law Summit in recognition of its innovative methods of intellectual property rights protection. Matthew Bassiur, vice president of global IP enforcement at Alibaba Group, was awarded the Luxury Law Innovator in IP Rights and Technology. When presenting the award, the president of the Luxury Law Alliance, said “Alibaba over the past three years has gone from being criticized for its efforts in IP protection to being viewed as a leader and innovator in the field.” However, also in April, Alibaba Group’s Taobao remained on the U.S. Trade Representative (USTR) Annual Notorious Markets List for the third year in a row. Taobao, an online shopping marketplace that connects individual consumers to a wide range of small sellers such as retailers, wholesalers, and other individuals, is said to be lacking in online brand protection. The report states that, “Although Alibaba has taken some steps to curb the offer and sale of infringing products, right holders, particularly SMEs (small and medium size enterprises), continue to report high volumes of infringing products and problems with using takedown procedures. Serious concerns remain about Alibaba’s responsiveness to SMEs, who continue to express concerns over ineffective takedown procedures, burdensome enrollment requirements for a Good Faith program that reduces the evidentiary burden for takedown requests, and Alibaba’s delays in responding to SMEs.” “Our results and practices have been acknowledged as best-in-class by leading industry associations, brands and SMEs in the US and around the world,” Alibaba said in response to the report. IPR Report In Alibaba’s 2018 Global Intellectual Property Rights Protection Annual Report, released in May 2019, the company states that “96% of the listings proactively removed by Alibaba in 2018 were eliminated before a single sale took place,” and boasts a 32% year over year decline in rights holder takedown requests. According to the company, “consumers likewise reported finding fewer suspect listings last year.” In its report Alibaba expands on its IP protection key initiatives. Much of the success of these initiatives would not have been possible without innovative technology and processes, as well as proactive IPR-protection efforts, the company says. Alibaba explains it “continues to complement its online

3. governance with offline investigation,” responding and supporting law enforcement authorities across China. Also, in 2017, Alibaba founded the Alibaba Anti-Counterfeiting Alliance (AACA), the first alliance of its kind in the world, according to the Alibaba report. It states that in 2018, the AACA grew from 30 founding members to 121 rights holder members, including companies such as Procter and Gamble, Tommy Hilfiger, Adidas, and Estee Lauder. Wiser Market: anti-counterfeit agency The fight against counterfeits is far from over. According to the April 2019 memorandum, “a recent Government Accountability Office report examined four categories of frequently counterfeited goods, and, based on a small sample of these goods purchased through various online third-party marketplaces, found that more than 40 percent were counterfeit.” Online brand protection companies like Wiser Market continue the battle against counterfeits in online marketplaces. We scan and analyze online channels 24/7, including e-commerce platforms and marketplaces, websites and domains, social media outlets, mobile apps, and more. The system uses multiple languages as it scans various local sites, automatically detecting potential IP infringements. At Wiser Market, we believe in proactive and preventative brand protection strategy. Our superb brand protection services, from detection through analyzing to enforcing takedown actions, results in over 90% success rate in taking down counterfeits. Is Your Brand protected? Contact us for a FREE brand review.