Alibaba counters critical New York Times piece – but e-commerce's counterfeit problem is now a mainstream issue 20 Mar 17
World Trademark Review has covered the topic of counterfeiting for over 15 years, but it is only in the past year or so that the illicit trade in IP-infringing fakes seems to have become a topic of regular interest for the wider media. Last week, the New York Times delved into the subject, but in doing so it provoked the ire of e-commerce giant Alibaba.
The explosion of the e-commerce industry worldwide – and the problems that its major players, such Amazon and Alibaba, face in terms of counterfeits being sold by third-party vendors on its platforms – have recently grabbed the attention of mainstream news outlets, including Bloomberg, CNBC and Forbes. In its latest coverage, the New York Times delved into the subject in a piece titled "A Small Table Maker Takes on Alibaba’s Flood of Fakes", which examined the plight of Arizona couple Greg and Sim Hankerson, owners of designer furniture makers Vintage Industrial. According to Mr Hankerson, the prevalence of knock-offs of Vintage Industrial pieces being sold via Alibaba’s sites means that he now spends as many as 12 hours a day combing the web for counterfeits, rather than doing the day-to-day work of running and growing his business. He uses image recognition software to pinpoint where his company’s own promotional photos are being used by counterfeiters to market their copies.
Hankerson told the Times that Alibaba has proven ineffective in responding to his complaints. He claims that while the Chinese company did force some vendors to remove Vintage Industrial photos, its online counterfeit reporting systems stopped working and he was unable to submit further requests. Hankerson also argues that, after emailing Alibaba’s investor relations and PR departments with a threat to publicise the matter, he was contacted by the company’s IP group, to which he handed details of over 400 suspect images. But while Alibaba made a few more takedowns based on this evidence, Hankerson claims that the process once again seems to have ground to a halt.
The Times story reports similar experiences from other US-based SMEs. Georgia jewellery maker Michelle Stennett filed several complaints to Alibaba after she saw fake versions of her products being sold both on Alibaba.com and on the street in China when she visited the city of Yiwu in 2012. While these complaints did result in some successful takedowns, Stennett told the New York Times that the amount of paperwork required by Alibaba was simply too much for her to handle alone. Also quoted in the article is Color Long, proprietor of Los Angeles-based childwear designers Reignland Concept. After finding fake versions of her clothes being sold via Alibaba.com – along with a stolen promotional picture featuring her son as a model – she tried contacting vendors directly. She claims she was not aware she could ask Alibaba for assistance in removing the counterfeits.
After the Times piece was published, Alibaba put out its own statement in response, suggesting that the article “lacked crucial information and details” which the Chinese company had provided to the newspaper, adding: “Prior to publication, the group had an extensive dialogue with the reporter and said it was unfortunate much of the relevant information and context the group shared about its IP protection system didn’t appear in the story.”
Apparently repeating what it had earlier told the New York Times, Alibaba stated that it had shut down close to 180,000 stores on its Taobao platform for repeated IP infringements in the 12-month period ending August 2016, as well as removing around 380 million listings offering counterfeit products for sale. The Chinese company also pointed out two favourable commentaries on its anti-counterfeiting systems, from US e-tailer Jewelry.com and the CEO of e-commerce app developer Slice.
“There are places where our systems can be improved to make them more effective, efficient and user-friendly, and we are working hard every day to make these improvements a reality,” an Alibaba spokesman is quoted as saying. “We appreciate the challenges faced by rights holders and want to cooperate with them in this fight… The closer a rights holder works with us, submitting their notice and takedown requests through our IPP platform, the better we can fight this war.”
As for the three SMEs featured in the Times article, Alibaba had the following to say: “If a rights holder chooses not to file notices using the system we have created to help them, it is very difficult for us to be successful in protecting their IP.”
That response is likely to rankle many rights holders, from small business owners or larger corporates, that feel they already have to devote too much time, money and manpower to anti-counterfeiting and trademark enforcement with regards to e-commerce platforms, like Alibaba’s, that host fake products. However, what is clear is that the online trade in counterfeits is now firmly considered to be the stuff of mainstream news coverage and current affairs. With the likes of the New York Times, CNBC and others now regularly reporting on counterfeiting, the pressure is piling on e-commerce providers to step up their fight against fakes – and trademark owners are finding that their voices are being more widely heard.
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