Alibaba Calls on Brands to Boycott Intellectual Property Agencies that File False Complaints

Alibaba Group is calling on vendors and brands to boycott intellectual property agencies that file false complaints to ‘badger and blackmail merchants’ on its e-commerce platforms.

According to Alibaba, it has banned Hangzhou Wangwei Technology from lodging takedown requests through it’s takedown platform for all of its ecommerce sites, including Tmall and Taobao. The company states that Hangzhou Wangwei Technology Ltd. is an abuser of its intellectual property rights reporting system. Alibaba said it would no longer process IPR claims lodged by the agency across its platforms and urged anyone engaging the agency to stop using its services.

“The purpose of the IPR system is to protect innovation, yet deliberately abusing the system for malicious or false complaints is unlawful behavior infringing the principles of integrity and justice and will cripple innovation, acting like sand in the gears,” said Chen Wenxuan, an Alibaba Group lawyer.”

Alibaba states that the decision to stop processing IPR claims from Hangzhou Wangwei stemmed from an investigation by its Platform Governance team that showed the agency has withdrawn more than 60 percent of its complaints when an appeal was lodged since 2015, a rate well above the norm for platform complaints.

Alibaba said it also had evidence suggesting Hangzhou Wangwei may have worked with distributors to lodge complaints against the distributors’ competitors to try and shut off their channels and drive customers to purchase branded goods from channels it favored or at higher prices than others were offering. Alibaba said it would not tolerate price-fixing on its platforms and added it might pursue legal action if the agency continues to lodge what it deemed “malicious” complaints against legitimate merchants.

Hangzhou Wangwei is only one of numerous agencies that have sprung up in China in recent years promising to help companies and brands manage their IPR. Many of the agencies operate legitimately, monitoring platforms and using authorized notification channels to lodge complaints and takedown requests for fake products. Others have resorted to grayer measures when they suspect an IPR violation.

Last year, 5,862 accounts in Alibaba’s intellectual property protection system were involved in malicious complaints. Around 1.03 million merchants and over 6 million products were victims of schemes that amounted to a total loss of 107 million yuan for a wide range of victims, including major brand owners, such as Nike. Trademark owners including Weixin and Tencent were subject to harassment and blackmail from trademark-squatting registration.

Overall, the Platform Governance team said malicious complaints accounted for 24% of the total complaints processed by Alibaba’s Intellectual Property Protection Platform, serving as a drain on the group’s efforts aimed at stamping out counterfeits on its platforms.

The company said it will continue to identify other possible offenders in the IPR claims area and look to support and protect the interests of legitimate merchants.

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