Alibaba’s Tmall and Taobao accused of facilitating illegal sales of Mary Kay cosmetics – South China Morning Post

Posted: Monday, October 30, 2017

An international cosmetics company has filed a lawsuit in Hong Kong against Chinese e-shopping platforms Tmall and Taobao, as well as two online shops, over sales of unauthorised versions of its products, according to court documents.

In a High Court writ filed on Wednesday, Mary Kay Inc said the two shops, Qingfeng Tmall Shop and Tmall Supermarket, had infringed its trademarks. It accused Tmall and Taobao of not conducting proper checks, as the shops had sold the products on their websites.

“Consumers are likely to be misled by Tmall’s Consumer Protection Policy to believe that the Qingfeng Tmall Shop … and Tmall Supermarket are endorsed, licensed or somehow authorised by [Mary Kay] to sell authentic Mary Kay products on Tmall platforms,” the US-based firm claimed in the writ.

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It is suing the platform owners, Zhejiang Tmall Network, Zhejiang Tmall Technology and Taobao China Holding, all of which are part of the Alibaba Group, which owns the South China Morning Post.

The remaining defendants are Meng Cheng County Qingfeng Agriculture Resources and Shanghai Tianyi Electronic Commerce, which run Qingfeng Tmall Shop and Tmall Supermarket respectively. They are unrelated to Alibaba.

A spokesman for the Alibaba Group said it believed the lawsuit had no merit. “We will present the facts, which will show why this is the case, and vigorously defend against the claims,” he said.

The other defendants in the case could not be reached for comment.

Mary Kay is seeking a court order to stop both the shops and platforms from any attempts to associate themselves with its brand. It asked the court to look into the damage it had suffered and order compensation.

Meanwhile, Mary Kay Hong Kong said it had no comment on the case.

The writ stated that the Qingfeng Tmall Shop successfully opened its first online store selling Mary Kay products exclusively after providing Tmall with forged authorisation in 2016.

But the store was shut down by Tmall twice at the request of Mary Kay, until August 2016, when it returned to business again with a new store on Taobao, selling predominantly Mary Kay products.

Lawyers for Mary Kay said they did not hear back from Taobao, according to the writ.

The other online shop, Tmall Supermarket, started selling Mary Kay products about a month later. But Tmall failed to find out whether the store was authorised to do so, the cosmetics company said.

The writ mentioned that Mary Kay had a manufacturing plant in Hangzhou and a return policy, but that the products sold by the two shops did not contain tracking codes, causing difficulties with the policy.

This led “disgruntled customers” who had experienced allergic reactions after using the products to post negative online reviews, according to the court paper.

“The illegal acts of [the two shops], by changing the condition of the Mary Kay products or selling unauthorised products, are detrimental to the reputation of the plaintiffs and value and goodwill of Mary Kay’s trademarks and products,” the writ stated.

The cosmetics company said the problem with the platforms – which received commission from product sales – was that they facilitated the brand infringement by the shops. Mary Kay said Qingfeng Tmall had also incorporated its name and web address.

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