Alibaba's Taobao sues petfood seller, claiming counterfeiting

Alibaba's Taobao online marketplace is seeking almost $400,000 in damages and legal fees from a vendor it claims sold counterfeit kitten chow.

The civil lawsuit claims the defendant – surnamed Yao - broke several of the Taobao's regulations prohibiting the sale of trademark-infringing merchandise, including counterfeit packs of Royal Canin brand pet food, in actions stretching back to January 2015. The illegal sales were discovered by a "mystery shopper" in May 2016 and an arrest was made the following October.

It’s the second civil action filed by Alibaba this year, coming after it took two vendors to court for selling fake Swarovski watches on Taobao, seeking 1.4m yuan in redress.

Taobao's mystery shoper purchased a 99 yuan bag of Royal Canin kitten food and sent it to the rights holder – Mars Petcare – and its Chinese representative. The bag's packaging and verification codes checked out, but on further inspection, Mars Petcare found tampering to the packaging and that the contents were fake.

Taobao has asked the Shanghai Fengxian District People’s Court to compel the defendant to compensate it for its total direct and indirect economic losses, loss of goodwill and legal fees, which it claims amount to 2.67m yuan. It is also asking the court to compel the defendant to publish a written apology in several prominent print and Web publications for a week.

The legal action comes shortly after a call by Alibaba chairman Jack Ma for China to tighten its counterfeit laws, enforcement and penalties. Ma maintains that a lack of deterrents in China hurts the country’s ability to innovate, damages its reputation and threatens the country’s future.

Last week, in a public appeal for the stiffening of counterfeit laws and penalties, Alibaba claimed that despite referring nearly 4,500 leads related to counterfeiting in excess of 50,000 yuan for criminal investigation, only 1,184 cases were followed up by law enforcement.