30 April 2019Trademarks

Alibaba to settle $250m counterfeits class action

Alibaba is to pay $250 million to settle a lawsuit in US district court accusing the Chinese e-commerce platform of concealing a warning over counterfeit goods ahead of its public share offering in 2015.

The 2015 class action suit said that Alibaba had failed to disclose a meeting with the Chinese State Administration of Industry and Commerce (SAIC) in relation to the company’s failure to tackle the sale of counterfeit goods on its marketplace.

The meeting is said to have been held in July 2014, just two months before Alibaba’s initial public share offering on the New York Stock Exchange, at which it raised $25 billion.

Alibaba will now settle the class action but has not admitted wrongdoing. If the settlement is approved by the court, it will end all pending litigation related to the matter.

According to the plaintiffs’ memorandum of law in support of the settlement, Alibaba has continued to insist “that the failure to disclose the July 2014 meeting was immaterial as a matter of law”.

Lawyers for the plaintiffs said that the proposed settlement was “inherently fair, reasonable, and adequate”.

The news comes amid mounting US criticism of Chinese companies’ efforts to combat the spread of counterfeit goods online.

The office of the US Trade Representative  last week published its  Notorious Markets List, which named an Alibaba subsidiary as a hotspot for counterfeit goods.

“Although Alibaba has taken some steps to curb the offer and sale of infringing products, right holders... continue to report high volumes of infringing products and problems with using takedown procedures”, the report said.

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