Robert Way
A U.S. judge on Wednesday rejected Alibaba’s (NYSE:BABA) efforts to dismiss a suit related to alleged sale of counterfeit versions of a popular children’s toy Squishmallows by several merchants on its online platforms, Reuters reported.
Judge Jesse Furman — of the U.S. District Court, Southern District of New York — noted that Kelly Toys — a unit of Jazwares, owned by Warren Buffett’s Berkshire Hathaway — plausibly alleged that Alibaba knew about and contributed to the merchants’ infringement of its copyrights and trademarks, the report added.
Kelly Toys said the sale of knock-offs on Alibaba has continued in spite of six earlier lawsuits to stop it, with Alibaba ignoring its own “three-strike” policies and giving some infringing merchants “Gold Supplier” and “Verified” status, the report noted.
Judge Furman did not rule on the lawsuit’s merits.
In November 2022, Kelly Toys had sued around 90 merchants accusing them of selling counterfeit Squishmallows, and got an injunction two months later. The company added Alibaba as a defendant in March.
In trying to obtain a dismissal, Alibaba said Kelly Toys failed to allege it had any involvement in infringements, and was trying to inaccurately shift the burden of policing its intellectual property by requiring “draconian” measures against sellers, according to the report.
Jazwares acquired a majority stake in Kelly Toys in April 2020. Berkshire acquired Jazwares’ parent, an insurance holding company Alleghany, in October 2022.
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