Kering Sues Alibaba Group Holding Ltd (BABA) For Selling Fake Products

Alibaba Group Holding Ltd (NYSE:BABA) is in trouble again as a lawsuit has been filed against the company by Kering in Manhattan federal court. The company has claimed damages from Alibaba for selling fake replica products of its Gucci and Yves Saint Laurent brands on the website. This is not the first time that the company has accused Alibaba of promoting the sale of pirated products, and a similar case was filed in August 2014.

An official statement issued by Kering confirmed the lawsuit and said that it was a part of the company’s efforts in maintaining the trust of its clients. Also, it was making sure that only original products are sold in global markets. This will help preserve the identity of the brand too.

Alibaba has been charged for breach of the trademark, forgery and other offenses for selling fake Gucci merchandise like watches and shoes and also for counterfeit shirts of Yves Saint Laurent.

Alibaba In Deep Waters

Kering has accused Alibaba of a conspiracy to produce and sell the fake products in the Chinese markets with the logos of the brands without permission from the company. According to Kering, a Gucci bag costing $795 was being sold for $2 to $5 by Alibaba to customers placing bulk orders of 2000 units or more. They alleged that even after bringing the same to the notice of the company, Alibaba continued the practice.

Kering wants the court to ban Alibaba from selling fake products of any brand with immediate effect and seeks damage worth $2 on every counterfeit item the company sells.

Alibaba Defense

Meanwhile, Bob Christie, a spokesman for Alibaba issued a statement, saying that the company was working in collaborations with various brands to maintain their intellectual property. He said that Kering was not seeking any cooperation and wasting time in filing useless lawsuits. Alibaba felt that the legal filing was baseless, and they were not going to leave it without a fight.

A fact sheet issued by Alibaba Group states that the company has a zero-tolerance policy on the sale of fake products on their site. The company is working on cooperating with numerous brands in fighting counterfeit products and adding new brands to the site every month.