China: Working With Taobao Against Fakes

Last Updated: 22 October 2013
Article by Paolo Beconcini

Owners have to protect brands

Taobao is a Chinese language web site for online shopping founded by Alibaba Group in 2003 which has become, by far, the largest e-commerce platform in the world, and thus a very appetizing market for counterfeits.Similar to eBay, it has than 60 million visitors daily, sells 48,000 goods each minute and has a C2C turnover of over 163 billion USD in 2012. As a consequence, it has become the object of attack for foreign brand owners who are fighting an ongoing battle with counterfeiters and who have invested heavily in attempts to curb the illegal transactions of counterfeits on Taobao.

Taobao shops closed daily

Hundreds of Taobao shops handling counterfeit goods are closed daily, but it is a losing game. Each time one is shut down, more pop up to take over the business. The perception among IP owners is that monitoring Taobao and shutting down its counterfeit shops is a waste of resources. Furthermore, it is difficult for a brand owner to actually assess if any damage at all has been done to an infringer by shutting down its Taobao window. Frustration is the inevitable outcome.It begs the question as to whether the action IP owners take with Taobao are really suitable in the long term to achieve their IP managements goals.

Is the problem with Taobao?

The frustration of IP owners towards Taobao leads often to a misperception. Taobao is accused of illegal handling and intentionally profiting of counterfeit business. In reality Taobao is very committed to IP protection. The company has internal regulations and ethical guidelines which are in place to monitor prevent and remove infringements. Furthermore, the vast majority of products on Taobao are original and brand new and are offered for sale at a fixed price.Nonetheless, in the field of brand protection, Taobao evokes a negative reaction. The reality is that few IP owners could say that Taobao is not receptive to their concerns. The proof is that Taobao is willing and ready to shut down e-stores as soon as an IP owner provides objective evidence of the infringement. Indeed, Taobao launched an IPR protection on-line system in 2011. As the right holder, brand owners can register all their trademarks, patents and copyrights there. After being checked by Taobao, the right owner can file complaint against suspected infringing links to remove the illegal pages. Also, when a user/owner receives a certain amount of complaints, he will be forced out of Taobao and will not be able to open e-shops in Taobao again. As Mr MA Yun, the former CEO of Alibaba Group said, the offline counterfeits are worse than those on Taobao. Understand and using Taobao is a lesson each right owner must learn to improve their company's brand protection strategy in China.

Closure is not a deterent

When it comes to counterfeiters, Taobao mostly hosts traders rather than factories. Shutting down web-shops in Taobao only impacts on traders temporarily as manufacturers and masterminds of counterfeit rings use in fact many distribution channels. Secondly, a new link in Taobao can be quickly re-established by using a new account and contacts. In practice, shutting down e-shops in Taobao may - at most - lead to a very temporary slowdown of infringing activities, but will neither be either a deterrent for infringers to stop counterfeiting nor a direct hit at the core structure of the counterfeit organization. If we rank trademark enforcement activities based on the deterrent value they have, for instance, on an infringing ring, shutting down a trader shop in Taobao does not rank among the first and most incisive actions. If the success and effectiveness of an action in Taobao is not realistically measured to these factors, it is evident that a brand owner will be easily and quickly frustrated.

Collecting information

Considering enforcement as an isolated enforcement activity will lead to frustration, misperceptions and ultimately to an ineffective enforcement and improper use of the possibilities offered by Taobao in the fight against counterfeiting.Based on our experience, Taobao should not be seen firstly as an enforcement target, but rather as an investigative tool. The availability of Taobao to cooperate should not be used only to shut down e-shops, but to collect more information. Taobao, in our opinion, gives an IP owner a source of information on the infringement trends of his brands. It can provide important information about counterfeiting, distribution channel control, and even act as a test for checking the popularity of certain brands over others, thus helping manage supply chain and marketing.

Investigative tool

If Taobao is seen more as an investigative tool and a source of information rather than an infringer itself, new brand protection strategies can be planned to exploit this tool rather than hitting on frustrating direct enforcement.Information collected on Taobao could be for example the perfect start to investigations aimed at finding not only the trader behind the e-shop, but also the factories and syndicate behind the trader. When, for instance, traders handling high volumes of fakes are found in Taobao, the IP holder should refrain from asking taobao to delete that e-shop. Rather, he should subject the target to further investigation and IPR enforcement by raids or civil lawsuit. By routinely shutting down the page (and this is what normally happens!), the brand owner deprives himself of the chance to hit a larger counterfeiting organization. In a comprehensive brand protection management strategy, such action would be an obvious mistake.

Police raid

That IPR enforcement in Taobao can be successful is also shown in some recent cases. In March 2013 the Chinese police in Nanjing, attracted by several complains by consumers investigated a shop on Taobao selling a certain NUTRILITE protein powder. Afterwards, the brand owner AMWAY purchased and tested some samples, and it was confirmed that the protein powder was fake. The police raided the premises and during the police action, more than 170,000 cans of fake AMWAY products were seized, with value for more than RMB 140 million (about USD 22 million). In March 2013, the Economic Investigation Department of Qingpu District Public Security Branch of Shanghai City seized more than 20,000 cosmetics of different western brands in a private house, valued at more than RMB 10 million (about USD 1.6 million). Eight suspects were arrested.

Changing perspective

The examples above are a simple demonstration of our recommended approach to infringement in Taobao. Brand owners in these cases have used Taobao not as the enforcement target but as a source of information and an investigative starting point. A change of perspective can solve the actual problem of the perceive frustration at the current most common strategy of merely shutting down trading e-shops in Taobao.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Paolo Beconcini
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.