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Kering and Alibaba join forces to protect intellectual property rights

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Kering and Alibaba join forces to protect intellectual property rights

French luxury group Kering SA, whose brands include Gucci, Bottega Veneta and Saint Laurent, and Chinese e-commerce giant Alibaba Group Holding Ltd., operator of the Taobao and Tmall platforms, said Aug. 3 in a joint statement that they would cooperate to protect intellectual property rights and to take joint enforcement action against alleged violators.

The companies have established a joint task force to exchange information and to work with law authorities to act against those who allegedly infringe the intellectual properties of Kering brands. The parties will utilize Alibaba's advanced technologies to identify any perceived infringements, the statement said, without elaborating on the technologies involved.

The agreement, which includes Alibaba affiliate Ant Financial Services, operator of the online payments platform Alipay, marks a shift in the companies' relationship. It had been tainted by a lawsuit filed by Gucci and other Kering brands with the U.S. District Court for the Southern District of New York against Alibaba and Alipay in July 2014 to dispute the sale of counterfeit goods on Alibaba's platforms. The case was suspended before Kering refiled the suit again in May 2015.

As part of the joint statement announced Aug. 3, the companies said that Kering had agreed to dismiss the lawsuit.

"This agreement reflects the parties' firm belief that taking proactive measures and using advanced technology will help law enforcement bodies and other relevant authorities address the challenges of intellectual property infringement," Kering and Alibaba said in the statement.

If infringements are identified, the two companies will take action online and offline, they said. This would include Alibaba shutting down the sale of counterfeit goods, as well as working with the police, a Kering spokesperson explained.

Exane BNP Paribas analyst Luca Solca said the agreement shows Alibaba wants to catch up with rival JD.com Inc., which he believes has leapt to prominence after saying in June 2017 it would acquire a stake in luxury e-commerce operator Farfetch.

"Alibaba stands no chance of being in digital luxury, if it doesn't guarantee a fake-free and price-disciplined market place," Solca told S&P Global Market Intelligence in an email. "I see this as a first step in that direction. Luxury brands, in the meantime, are moving forward with their mono-brand websites in China."

Hangzhou-based Alibaba has been working with international brands since the beginning of 2017, utilizing big data and counterfeiting technology to counter fake products. The Alibaba Big Data Anti-Counterfeiting Alliance, announced in January 2017, had about 20 initial members, including brands such as LVMH Moët Hennessy Louis Vuitton SE's Louis Vuitton, Samsung and Swarovski.

Alibaba has said that between April and July 2016 it helped to shutter more than 400 rackets; arrest more than 300 suspects; and seize fake goods utilizing big data, algorithms, artificial intelligence and machine learning expertise, according to Alizila, a news site for Alibaba.

Alibaba, which has said its anticounterfeiting technologies can scan as many as 10 million product listings a day, removed more than 380 million product listings and closed down 180,000 third-party seller stores in the year ended August 2016, according to Alizila.