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Taobao and IACC Join Forces to Combat Counterfeiting Online

Taobao Marketplace recently signed an agreement with the International AntiCounterfeiting Coalition (“IACC”) which creates a framework for collaboration to address sales of counterfeit goods online. The agreement is the result of more than a year of negotiations between the parties.

Taobao Marketplace, a business within Alibaba Group, is China’s largest consumer-to-consumer (C2C) online marketplace with more than 800 million product listings and more than 500 million registered users as of June 2012. The IACC is a Washington, DC-based not for profit organization whose members include many of the world’s best known brands across all product sectors.

Under the agreement, the IACC and its participating members will assist Taobao Marketplace with the identification of listings for infringing products offered for sale on the platform, and of repeat or high-volume infringers, which will be subject to expedited removal procedures. The parties will also collaborate to assist law enforcement with follow-up investigations and offline enforcement.

Alibaba Group has been reportedly discussing establishing China’s first Internet bank with the Chinese Banking and Regulatory Commission and the Ministry of Finance. The registered capital for Alibaba’s Internet bank is said to be RMB1 billion (approximately US$163.5 million). The Internet bank will be providing micro and small financial services including deposits, loans and transfers. Internet banks differ from traditional banks most notably in a lack of a bank building and the application of Internet technologies to conduct all businesses. The move to establish an Internet bank will make it more important than ever that Alibaba Group comply with the IACC’s Payment Processor Portal Program, which allows members of the IACC to report online sellers of counterfeit or pirated goods to the IACC for further action by credit card and payment processing networks.

Launched in January 2012, the Payment Processor Portal Program is a collaborative effort of the IACC and the payment industry to create a streamlined, simplified procedure for members to report online sellers of counterfeit or pirated goods directly to credit card and payment processing networks. Rights-holder and service provider members representing their rights-holder clients are eligible for participation in the program. Current partners to the initiative include MasterCard, Visa International, Visa Europe, PayPal, MoneyGram, American Express, Discover, PULSE, and Diners Club.

Joe Ngan, an associate at Gibson Dunn, contributed to this post.

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