Alibaba labels itself a “scapegoat” as Taobao remains on USTR’s Notorious Markets List

The latest Office of the US Trade Representative’s (USTR) Special 301 Out-of-Cycle Review of Notorious Markets has prompted outrage from Alibaba Group.

While the USTR commended Alibaba “for its efforts to date”, it held that the company must develop “more effective” tools to combat infringing goods being sold on its platforms, adding that “a high volume of infringing products reportedly continue to be offered for sale and sold on Taobao.com”.

Alibaba immediately insisted that it “not only met but dramatically exceeded the USTR’s 2016 requests”, with a media statement hitting out at the USTR’s motives: “As a result of the rise of trade protectionism, Alibaba has been turned into a scapegoat by the USTR to win points in a highly-politicised environment and their actions should be recognised for what they are. The USTR’s actions made it clear that the Notorious Markets List, which only targets non-US marketplaces, is not about IP protection, but just another instrument to achieve the US Government’s geopolitical objectives.”

Speaking to World Trademark Review days after the report was published, an Alibaba spokesperson doubled down on the company’s stance, arguing that brand owners should no longer trust the Notorious Markets List because it is now less about IP rights and more about the US government’s political objectives. When asked if that meant Alibaba would no longer be cooperating with the USTR in the future, the spokesperson replied: “We have not yet made a decision on this front.”

The Chinese government has subsequently questioned the credibility of the Notorious Markets List, with the Ministry of Commerce claiming that the report lacks “solid evidence and supporting data”.

Counsel comment

I do not believe the USTR should respond [to Alibaba’s criticism]. The USTR is the authority and should be the final word. Let Alibaba keep decrying themselves as innocent. That’s what guilty parties do. [The list] is an honest account of what brands view to be the least helpful entities when it comes to enforcing IP rights: I have hundreds of clients that have counterfeiting concerns and the majority of them see no assistance from Taobao.

Rob Holmes, CEO of IPCybercrime.com