A day after the U.S. Trade Representative’s Office put Alibaba’s Taobao e-commerce platform back on its “Notorious Markets List” for counterfeit and piracy infringements, the company’s chief executive officer responded in a detailed internal company memo.
Alibaba Group ceo Daniel Zhang on Thursday told the Chinese company’s Platform Governance team, “This is a disappointing moment for all of us. Over the past year, we reorganized our team, optimized our tactics and armored up with technology. We spared no expense and manpower to upgrade our team, and launched an all-out war against counterfeits.”
Despite this, Zhang told the team, which is largely responsible for Alibaba’s intellectual property enforcement work, that over the past year it had identified a large number of links to infringing products using big data analytics.
“The number of links removed was 16 times the number of links reported by rights owners,” he wrote. “Working with law enforcement, we shut down many counterfeit-manufacturing factories and sent over 800 counterfeiters to prison in the protection of brand owners.”
In the letter, which was meant to outline the company’s ongoing commitment to anticounterfeiting and IP protection, Zhang praised the Platform team, saying it “rose up to the challenge and was relentless in the fight over the past year.”
In its report released Wednesday, USTR did not agree.
“The Taobao.com e-commerce platform is an important concern due to the large volume of allegedly counterfeit and pirated goods available and the challenges right holders experience in removing and preventing illicit sales and offers of such goods.”
Right holders in the U.S. and elsewhere have continued to report serious challenges to reducing high levels of counterfeit and pirated goods on Taobao, said the report, and “long-standing obstacles to understanding and utilizing basic IP enforcement procedures continue unabated.”
USTR also referenced Alibaba’s enforcement program’s lack of transparency.
The American Apparel & Footwear Association and 17 other organizations filed a complaint in October with USTR over counterfeits sold on Alibaba’s online platforms, urging the agency to step up its scrutiny of the Chinese e-commerce giant and relist it on the counterfeit watch list.
“We are disappointed today, but not because we didn’t fight hard enough,” Zhang wrote. “It is because even though we gave it our all and then some, the United States Trade Representative has returned Taobao to the Notorious Markets list.”
Zhanbg said in his memo: “I want to remind everyone that we are not defined by those who cannot appreciate us for what we have achieved,” Zhang said. “What matters is whether we’ve done all that we can, whether consumer experience has been improved, and whether we have instilled fear into the hearts of counterfeiters.”
He said Alibaba’s efforts and investments into anticounterfeit was not motivated by the list, and “neither will it have any bearing on our continual fight against counterfeit moving forward.”
Instead, the company’s efforts are driven by ensuring and promoting fairness on its Taobao marketplace and serving “the 400 million consumers that love our retail marketplaces,” he wrote.
He said 10 million merchants collectively sold $500 billion worth of goods on our platform last year.
USTR took note of efforts to improve IP enforcement, but said, “While recent steps set positive expectations for the future, current levels of reported counterfeiting and piracy are unacceptably high.”
Zhang wrote, “The fight against counterfeit is a fight against the dark side of human nature. Counterfeiters are like bacteria in the air that we breathe. Eradicating counterfeits require serious, long-term commitment and cannot be achieved over night.”
USTR had removed Alibaba from the list in 2012, but said it had now taken a step back, causing it to be relisted.
Zhang said the company is working on using technology to defeat counterfeiters.
“Our entire business is at stake in this,” Zhang added. “Today, our developers understand counterfeiters better than the counterfeiters understand themselves. Counterfeiters hate the police, but they fear Alibaba. That is the true measure of our success.”