US judge dismisses part of lawsuit brought by luxury brands against Alibaba and others

In a relief to Alibaba, a US judge on Thursday dismissed part of a lawsuit against the Chinese firm for allegedly assisting in the sale of counterfeit goods.

The 2015 case against the Chinese e-commerce giant was brought by Yves Saint Laurent, Gucci and others.

The luxury brands accused the e-commerce company and 14 other companies of selling counterfeit products on their online marketplaces.

According to the luxury brands, Alibaba and the companies formed a joint enterprise to rake higher profit from the sale of counterfeit products. For instance, a copy of a $1,000 Gucci bag was on offer on the online platforms for just $18.99, as per the suit.

The lawsuit further alleged that Alibaba's search engine suggested terms like ''guchi'' and ''cucchi'' when ''Gucci'' is typed into the search bar. The lawsuit claimed this directed consumers to sellers of fake merchandise, and the Hangzhou-based company profited from the sales of such keywords.

The brands had called for a court order to prevent the Chinese e-commerce giant from participating in the marketing, distribution and sale of counterfeit products. Also the luxury brands had been seeking damages on the basis of sales or profits from the products.

US district judge Kevin Castel in Manhattan dismissed the claim of racketeering made by Paris-based Kering SA and the brands it owned, saying the petitioners  had failed to back-up the claim with facts. Castel ruled that the existence of such an enterprise was not proved under the federal racketeering law as the complainants failed to establish merchants were aware of each other or that Alibaba carried out actions with them.

''The fraud perpetrated by each merchant defendant could be accomplished without any assistance from any other merchant defendant,'' Reuters reported him as saying.