A recent ruling by Judge Jesse Furman of the Southern District Court of New York has decreed that Chinese ecommerce giant, Alibaba, must proceed with a lawsuit filed against them by U.S. toymaker, Kelly Toys Holdings. The lawsuit alleges that Alibaba’s online platforms were utilized for the sale of counterfeit Squishmallows, popular plush toys manufactured by Kelly Toys, which is owned by Jazwares. Jazwares is a subsidiary of Alleghany Corp., controlled by billionaire Warren Buffett’s Berkshire Hathaway.
Despite Alibaba’s request for dismissal, the court rejected their motion. One of the basis for Alibaba’s motion was the usage of their informal corporate name, Alibaba.com, instead of their formal name. However, this argument did not sway the decision.
As per Kelly Toys’ complaint, sales of counterfeit Squishmallows on Alibaba sites continued unabated, even after previous lawsuits were filed to stop these activities. The earlier case sought to halt around 90 ecommerce companies from selling fake versions of the toys. In March, Alibaba was added as a defendant in this ongoing legal battle.
Judge Furman noted that Kelly Toys claimed that despite being aware of the infringing listings on their platforms, Alibaba allowed them to proliferate. The court considered these claims plausible and therefore denied Alibaba’s motion to dismiss the case.
This ruling serves as a significant development in the ongoing fight against counterfeit merchandise. The case underscores the responsibility that ecommerce platforms bear in ensuring the authenticity and legality of products sold through their channels.