A Chinese court has sent two brothers to prison and fined them for extorting money from Taobao vendors.
From May to July last year, Liang Tiejun and his brother Liang Tiemin set up a fake domain and started filing bogus intellectual property complaints against Taobao vendors, providing falsified proof of intellectual property ownership and asking for takedowns.
They would then approach vendors and offer to withdraw the complaints if the vendors paid them a “licence fee”.
The scam came to light through tips Alibaba provided in August to authorities in the Guangdong province city of Foshan. Alibaba’s platform governance team detected the malicious claims through analysis of big data. Foshan authorities investigated and worked with police in Hebei and Hunan provinces to arrest the brothers in September.
The investigation determined that the two men had extorted between RMB1000 (US$146) and RMB30,000, depending on the value of the products, from 98 Taobao vendors in 16 provinces and 47 cities over the two months.
The Guangdong Province Nanhai District People’s Court in Foshan City identified seven cases of extortion over the internet for total amount of RMB49,200. It sentenced Liang Tiemin to 18 months in prison and fined him RMB10,000. Liang Tiejun received an eight-month sentence and a RMB5000 fine.
Call for clampdown
Meanwhile, Alibaba has been stepping up its IPR-protection efforts. Executive chairman/founder Jack Ma has called for tougher laws, better enforcement and stiffer penalties for violations. The group’s platform governance unit has been working closely with authorities, offering tips gleaned from its own investigations and analysis of big data.
After first calling for a boycott of companies and agencies engaged in malicious claim-filing, on February 14 Alibaba sued an IPR agency, Hangzhou Wangwei Technology, for unfair competition by filing false claims, and sought civil damages.
“Malicious complaints have become a black spot in our industry,” says Alibaba Group chief platform governance officer Jessie Zheng. Her unit last year identified 5862 accounts suspected of making malicious complaints, and estimates the loss of assets and business involved at RMB107 million.
Alibaba has also lodged lawsuits against vendors who violated the IPR of brands trading on its platforms. It sought damages early this year for trading violations from a company that knocked off Swarovski products and another that sold fake cat food.
This article originally appeared on Alizila, independent but Alibaba-funded source of news on Alibaba Group activities.
