Alibaba Strives To Protect Intellectual Property

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The online retailer faces a challenge to protect its market from sales of counterfeits to survive in the ecommerce industry

Recently, Alibaba Group Holding Limited broke international records for its “Single’s Day” promotional event on November 11 last year, delivering merchandise worth of $14.3 billion in only a day.

The figure also shows a difficulty with the huge scale of sales – how to ensure the authenticity and quality of items. This is especially pertinent provided the desire of the web retailer to grow outside China and turn itself into a truly international brand. Due to this reason, intellectual property (IP) protection has continued to be an important part of the strategy of the organization in the previous few years, with more developments in 2015 to assure foreign and local businesses and consumers that the offered products are lawful.

If one goes back some years, most consumers aware of Taobao or other websites like it would find out the “Wild West” nature of the marketplace. Just like the American online trading platform eBay before it in the Western region, the comfort with which persons could deliver counterfeit products and earn profit from almost ubiquitous.

For Alibaba, tracking and checking such a huge number of products proved very difficult. Since its initial public offering, the online retailer is in a very better position to regulate its marketplaces as it devises its business strategies, but also susceptible as it is being pressurized from organizations to ensure that IP is protected as it knows that its trustworthiness is essential to succeed in the future.

It realizes the importance of safeguarding its own IP and in turn the companies’ IP that have offered their goods on its online trading platforms. In April last year, the State Administration has also pressurized it for Industry and Commerce (SAIC) previously in April last year with data from the Chinese authority suggesting 63% of registered brand products on the website are not legitimate.

New trademark legislation was implemented on May, two years ago with more strict penalties for recurrent infringements. The company has been focused and was no longer in a position to ignore the matter of counterfeits.

The Hangzhou based organization has been targeted by many lawsuits – examples include French luxury company, Kering SA, which holds brands like Volcom, Puma , Gucci, Brion and Alexander McQueen.

According to Law360, Kering sued by claiming Alibaba permitted merchants to deliver fake versions of the products of the luxury makers. It claimed that the sellers were cutting the value of those trademarks in which brands have invested millions of dollars.

Recently, not only legal pressure has shaped the efforts of the organization, nevertheless. The transition is also according to the anti-graft measures taken by the government as well as consumer pressure in its home country where purchasers are interested in purchasing the original article instead of fake no matter the price difference.

Such a lot of pressure, together with the intent to become internationally competitive, has seen the company committing itself to safeguard IP.