A part of the lawsuit filed against Chinese e-commerce giant Alibaba Group Holding Ltd. for aiding the sale of counterfeit goods was dismissed by a United States judge on Thursday. The case was brought before the court in 2015 by luxury brands like Gucci, Yves Saint Laurent and others.
The lawsuit accuses Alibaba and 14 other companies of selling counterfeit goods on their online marketplaces. It also claims that the companies formed a joint enterprise which seeks to profit from the sale of fake branded items. For instance, a Gucci handbag — originally for $1,250 — was being sold for $18.99 on the online platforms mentioned in the suit.
U.S. District Judge Kevin Castel in Manhattan dismissed the claim of racketeering made by Paris-based Kering SA and the brands it owns, saying the petitioners were unable to back up the claim with facts. The existence of such an enterprise was not proved under the federal racketeering law as the complainants were unable to establish that the merchants were aware of each other or that Alibaba carried out actions with them, Castel ruled.
“The fraud perpetrated by each merchant defendant could be accomplished without any assistance from any other merchant defendant,” Reuters reported him as saying.
However, the ruling does not affect other trademark-related claims in the lawsuit against Jack Ma’s Alibaba. The company did not seek dismissal of the other parts of the case at the moment and it was pleased with the court’s decision, according to Reuters.
In May this year, the International Anti-Counterfeiting Coalition (IACC) suspended Alibaba’s membership after major luxury brands like Gucci, Michael Kors and Tiffany & Co. withdrew from the Washington, D.C., coalition in protest against Alibaba’s inclusion.
In the face of repeated allegations that its online shopping sites are full of fake or otherwise copyright-infringing goods, Alibaba has said it is attempting to strengthen its monitoring and enforcement of rules that prevent counterfeits from infiltrating the market.