Alibaba must face lawsuit in US over counterfeit Squishmallows
By Jonathan Stempel
NEW YORK, Dec 27 (Reuters) -A U.S. judge on Wednesday rejected Alibaba's BABA.N 9988.HK bid to dismiss a lawsuit over the alleged sale by various merchants of counterfeit versions of the popular children's toy Squishmallows on its online platforms.
U.S. District Judge Jesse Furman in Manhattan said Kelly Toys, whose parent Jazwares is owned by billionaire Warren Buffett's Berkshire Hathaway BRKa.N, plausibly alleged that Alibaba knew about and contributed to the merchants' infringement of its copyrights and trademarks.
Kelly Toys said the sale of counterfeits on Alibaba has persisted despite six earlier lawsuits to stop it, with Alibaba ignoring its own "three-strike" policies and awarding some infringing merchants "Gold Supplier" and "Verified" status.
Alibaba and lawyers for the Chinese e-commerce company did not immediately respond to requests for comment. Furman did not rule on the lawsuit's merits.
Kelly Toys had in November 2022 sued about 90 merchants it accused of selling counterfeit Squishmallows, and obtained an injunction two months later. It added Alibaba as a defendant in March.
In seeking a dismissal, Alibaba said Kelly Toys failed to allege it had any involvement in infringements, and was trying to improperly shift the burden of policing its intellectual property by requiring "draconian" measures against sellers.
Jazwares bought a majority stake in Kelly Toys in April 2020. Berkshire bought Jazwares' parent, the insurance holding company Alleghany, in October 2022. Revenue at Jazwares totaled $847 million in the first nine months of 2023.
The case is Kelly Toys Holdings LLC v 19885566 Store et al, U.S. District Court, Southern District of New York, No. 22-09384.
Reporting by Jonathan Stempel in New York
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
