The web and its most heavily shopped e-commerce sites are filled with fakes and luxury brands and consumers alike are none too happy about it. In the latest developments of a larger push to make good on their vows to clean up their sites, Alibaba and eBay are taking steps to eliminate the widespread availability of counterfeit goods on their platforms.
At the same time, Chinese officials have spoken out in support of cooperation with other countries to bolster the protection of intellectual property rights in the country, which has been widely regarded as a haven for counterfeit goods and cybersquatting activities.
Meanwhile, New York-based brand Diane von Furstenberg is getting a makeover that bears quite a bit of legal significance.
Alibaba to Fight Fakes and Its Bad Reputation
Since being re-included last month on the U.S. Trade Representative’s “Notorious Markets” list, an annual release that identifies the physical and online markets known for the sale of counterfeit and intellectual property rights-violating goods, Alibaba is making its fight against fakes known. Earlier this month, the Chinese e-commerce giant filed lawsuits in a Chinese court against two of the estimated 8.5 million-plus active sellers on its sites. The two sellers at issue are being charged with selling counterfeit Swarovski goods on Alibaba’s Taobao platform.
This week, on the heels of a much-publicized meeting last week between Alibaba chairman Jack Ma and President-elect Donald Trump, in which Ma pledged to create a million new jobs in the U.S., Alibaba unveiled the launch of its “Big Data Anticounterfeiting Alliance.” The initiative will see the Chinese company working with 20 brands, trade associations, intellectual property experts and regulators — including Louis Vuitton, Swarovski and Samsung — to crack down on counterfeit goods on its e-commerce platforms. Not on that list? Yves Saint Laurent, Balenciaga, Gucci and their parent company Kering, which are currently embroiled in counterfeiting-centric litigation against Alibaba — their second lawsuit against the Chinese entity in the past few years.
Given Alibaba’s reputation for widespread abuse of intellectual property rights — something that has been highlighted not only by the U.S. Trade Representative but in the number of lawsuits filed against it by famous trademark holders, including LVMH Moët Hennessy Louis Vuitton and Kering — it is worth asking what the Chinese company is really fighting. Is the publicly traded e-commerce conglomerate fighting fakes or fighting public perception that it does not place significant value on others’ intellectual property rights? Most likely, it is a bit of both.
EBay Wants to be Taken Seriously as a Luxury Seller
Alibaba is not the only entity working to make strides in terms of intellectual property. Looking to grab a larger portion of the currently booming luxury resale market, eBay has revealed that it will begin authenticating luxury handbags, footwear and other commonly counterfeited luxury goods this year as a means of providing consumers with confidence and distinguishing itself from similarly situated online sellers.
Given the ever-growing presence of counterfeit goods in the market and the increased sophistication of counterfeit sellers, which have been able to dupe even well-meaning purchasers, the move makes sense for eBay. The new service, which will enable sellers to “pay for the authentication service to win the confidence of shoppers,” will involve eBay’s use of a network of brand experts to verify the authenticity of goods being offered for sale on its site.
Additionally, the push towards transparency stands to allow the early adopter of the online marketplace model a leg up against rivals, such as Amazon, for instance, which has come under fire for the widespread sale of counterfeit goods on its site. It will also enable eBay to compete with increasingly popular resale sites, such as TheRealReal.
DVF Undergoes a Logo Change
Following in the footsteps of Yves Saint Laurent, Brioni and Louis Vuitton (with its recent packaging change), Diane von Furstenberg has opted to revamp one of its most valuable assets: Its trademark. The New York-based brand introduced a new, pared-back brand identity — complete with a reworked logo, which spells out von Furstenberg’s name in full in a white sans serif font against a saffron background (something of a popular color choice) — to coincide with the impending second showing by new creative head Jonathan Saunders.
Doing away with its former logo – a design that consisted of just the “DVF” initials – is more than merely a superficial change for the brand. The redesign actually bears some legal significance, given that brand names, logos and even colors may be protected by law under the umbrella of trademark. While the company has not yet filed to federally register the new logo design with the U.S. Patent and Trademark Office, its use of the logo — even if only on social media right now — is helping to build legal rights to it, as the core value of a trademark is the public’s ability to link the actual design of the mark — and the products associated with it — with the brand that it identifies. Luckily for DVF, this likely will not be too difficult given that the logo bears the brand’s name.
China Changes Its Tune on Intellectual Property Rights
While President-elect Donald Trump has threatened to take a tougher stance on trade, including imposing tariffs on China after labeling the country a currency manipulator, Chinese intellectual property officials have said they are willing to enhance intellectual property rights cooperation with other countries, on the heels of ongoing national IPR reform (including changes to the national trademark system that favor non-native entities).
Increased attention from Chinese officials, paired with statutory revisions, especially the ones that address bad faith applications, serve as significant lifelines for international trademark holders, particularly fashion and luxury ones, which consistently fall victim to widespread manufacturing of counterfeit goods and the trademark squatting and bad faith filing practices for which China is known.
Over the past several years Christian Dior, Hermès, Costume National, Iceberg, Michael Bastian, Moncler and Ermenegildo Zegna, among others, have all faced trademark battles after Chinese entities have filed trademark registrations for their brand names, thereby preventing the rightful IP holders from doing so.
According to Gan Shaoning, the deputy director of China’s national IPR system, “Exercising strict IPR protection is not only a demand for the country to attract foreign investment, open up to the outside world and pursue innovation-driven development but also an essential requirement for upgrading economic and social development.”
Julie Zerbo is the founder of The Fashion Law.