Decision to sue two of its vendors for selling fake watches represents first legal action the Chinese e-commerce giant has taken against counterfeiters on its Taobao platform.

It is said that if a business wishes to see if its products are being counterfeited, it just needs to run a search on Alibaba. The Chinese auction site dwarfs equivalents such as eBay in terms both of its product range and revenue, and also acts as a major channel for the sale of fake goods, much to the frustration of brand owners.

News this month that Alibaba has launched a legal action against two vendors for the sale of counterfeit Swarovski watches may offer a glimmer of hope to companies battling against Chinese counterfeits. The company has said it will continue to crack down on counterfeiters and that it already had a list of other suspected vendors who would face similar action.

Cracking down on fakes: how to take action If you find your company’s products after running a search on Alibaba, the platform’s complaint process is still the best place to start before starting a more expensive legal action. Online monitoring will help you to build up evidence of counterfeit activity that should make it possible to ensure the website removes the goods or seller.

However, brand owners are advised to tackle the source of the counterfeit goods, not just the channels in which they are sold. Where a problematic seller is identified on Alibaba, for example, additional investigation will help you to find out more about the product’s manufacturers and distribution channels in order to stamp them out at source.

Here, IP registrations, as well as techniques to prevent and identify activity, will be important. This includes, for example:

  • registering key brand and product names as trademarks, and innovative design features as design rights, so that you can seek legal redress for any unauthorised use of those trademark or design rights (e.g. for the manufacture, distribution and sale of trademarked goods);
  • raising awareness of the issues within your business by educating your staff, business partners and customers;
  • actively monitoring the online and offline market, recording, reporting and carefully analysing the findings;
  • working closely with law enforcement authorities such as the Border Force (Customs) and local Trading Standards offices that have a statutory duty to enforce the criminal provisions of Trademark Acts; and
  • taking enforcement action where appropriate.

If the manufacture of the fake goods is taking place in China, you will need to liaise with local agents or investigators and involve local police and authorities in order to target the manufacturer at source. This is not a simple task. Novagraaf provides anti-counterfeiting services to a number of brand names in the country, from online trademark monitoring to investigation, trap purchases, trademark training, trademark recordals and legal representation in customs seizure proceedings.