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Buying Fake Products Online

Fake products used to make their way into buyer's hands via street corner transactions or flea markets.

By Todd Datz

January 01, 2006 — CSO —

Fake products used to make their way into buyer's hands via street corner transactions or flea markets. Today, all it takes to reach millions of people is a laptop and an online connection.

One of the biggest B2B e-commerce sites in China is Alibaba International (www.alibaba.com), a global trading marketplace that boasts 1.7 million registered users from more than 200 countries and territories. The company's Alibaba China B2B site (www.china.alibaba.com) serves the domestic market, and its TaoBao site (www.taobao.com) is China's most popular consumer-to-consumer trading site. According to the Alibaba International website, it did $1.5 billion in transactions in 2004. That's a lot of product changing hands.

Unfortunately, says Jeffrey Unger, CEO of brand protection company GenuOne, some of those goods are counterfeit, and not of the onesie, twosie variety, but containers full. "The amount of challenge and pain they can cause an organization with one click of the mouse has brought the issue to a whole new level," he says. "Alibaba has changed the gamethey can move so much merchandise so quickly now; the challenge is tracking down and identifying trademark and IP infringement," he says. Unger adds that efforts to thwart trademark infringement and other IP laws on sites like Alibaba.com and other B2B tradeboards has been unsuccessful to date.

Porter Erisman, VP of corporate marketing at Alibaba, takes issue with those claims. In an e-mail response to a list of questions, he disagreed with the assertion that a lot of counterfeit goods are traded on Alibaba and says that the company has "human and technical safeguards in place to flag suspicious listings, but no system is perfect as we are a platform for others to post their products. So we also work closely with IP rights holders to respond to their requests when a violation is suspected." He supplied an outline of Alibaba's Intellectual Property Protection Program, which says that any content deemed suspicious or that violates Alibaba.com's terms of useincluding violations of trademark, copyright and patent lawswill be removed.

Erisman says that Yahoo's $1 billion investment in Alibaba.com last year will help the company deal with infringement issues. "The partnership is going to strengthen protection for intellectual property rights holders," he says.

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