AAFA Brings Alibaba Counterfeiting Concerns to USTR

The American Apparel and Footwear Association sent the following letter to the USTR regarding the issue of counterfeit garments for sale on Alibaba, and sent a similar missive to SEC chairwoman Mary Jo White.

"The Honorable Ambassador Froman
United States Trade Representative
600 17th St NW
Washington, D.C. 20508

Dear Mr. Ambassador:
We are writing to enlist USTR's assistance in AAFA's ongoing efforts to fight
the rampant proliferation of counterfeit apparel and footwear on the TaoBao
platform of Alibaba.

Representing more than 1,000 world famous name brands, the American
Apparel & Footwear Association (AAFA) is the trusted public policy and
political voice of the apparel and footwear industry, its management and
shareholders, its four million U.S. workers, and its contribution of $361 billion
in annual U.S. retail sales.

Our members have been on the front lines in the fight against counterfeits for
decades. Today, online enforcement is more important than ever.
Alibaba's TaoBao platform is notorious as one of the biggest platforms for
counterfeit goods worldwide. Our members encounter innumerable
counterfeits on TaoBao every day, which result in millions of dollars of lost
sales, damage to reputation, legal costs, and exhaustion of internal
resources. While some have had mixed success in securing take-downs of a
small percentage of these infringing products, others are frustrated at the
slow and cumbersome procedures that prevent swift action. Even successes
are short-lived as counterfeit products often reappear within hours or days of
a take-down.

USTR removed TaoBao from its Special 301 Notorious Market list in 2012
even as it signaled ongoing concerns over the widespread availability of
counterfeit apparel and footwear on that site. USTR declined to relist TaoBao
in the 2013 and 2014 reports.

Since TaoBao was delisted, the problem of countefeit apparel and footwear
on the site has worsened.

Included with this letter is a document created by AAFA membership detailing many of the issues our industry has had in working with TaoBao for the last decade. These issues include:
  • Lack of clarity or consistency in documents necessary to effectuate a take-down
  • Long delays before take-downs are executed
  • A weak punishment system
  • Lack of cooperation with local law enforcement
  • Lack of enforcement for Copyrights and Trademarks
  • Lack of trust by TaoBao in brand owners' take-down requests
  • TaoBao acting as both judge and jury in determining whether a take-down request is justified
For much of the past year, AAFA has been working with representatives of Alibaba to address these concerns. Although Alibaba has publicly accepted several of the concepts we've discussed, including an updated take-down system, a “trusted reporter program,” and an increased focus on physical raids and law enforcement cooperation, implementation has been sluggish or non-existent.

The slow pace has convinced us that Alibaba is either not capable of or interested in addressing this problem. A strong message from USTR stating that the status quo will read to the relisting of TaoBao in the 2015 report would send a clear signal that rhetoric without action will not be tolerated. We urge you to use every opportunity to deliver this message to officials from Alibaba and in other applicable intellectual property rights fora.

In the coming months, we will work with our members to provide further information to you on specific areas of action. It is our hope that, working together, we can significantly eliminate this counterfeit scourge.

Thank you for your swift attention to this matter.

Juanita D. Duggan
President and CEO"
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