Alibaba files trademark infringement lawsuit against Alibabacoin in the United States

Alibaba files trademark infringement lawsuit against Alibabacoin in the United States

Trademark law in the United States is intended to protect consumers from inferior quality products.  When a company uses a trademark on products, the company is granted certain exclusive rights to the trademark.  Registering the trademark with the United States Patent and Trademark Office is not required but registration will grant the trademark owner additional rights.  If someone other than the trademark owner uses the trademark to brand products that is considered trademark infringement.  Sometimes trademark infringement is innocent and unintentional, but most of the time trademark infringement happens because the infringer wants consumers to associate their products with a famous brand.  The infringer hopes that consumer confusion will help sell more products.  If a trademark owner allows other people to use a similar trademark, consumers will get confused as to who owns a trademark, and the trademark owner risks loosing the rights associated with the trademark.  United States trademark law requires a trademark owner to jealously protect their trademark or risk loosing their trademark rights.

A case which illustrates a trademark owner diligently protecting their trademark is Alibaba Group Holding Limited v. Alibabacoin Foundation et al.,  1:18-cv-02897 (S.D.N.Y. 2018).

Alibaba Group is a major Chinese e-commerce website.  Alibaba is probably the best known China based website, outside of China.  Alibaba Group owns numerous trademarks registered with the United States Patent and Trademark Office.  Through the promotion of its trademarks Alibaba Group has created substantial consumer goodwill and become one of the most renowned and successful businesses in the world.

The defendant in the case is Alibabacoin Foundation, a company based in Dubai.  Alibabacoin is a company that uses blockchain technology for shopping and financial transactions.  Alibabacoin has promoted its products in a number of different countries including the United States.

Alibaba Group alleges that Alibabacoin is attempting to misappropriate the consumer goodwill that Alibaba Group has developed using the Alibaba trademark.  Specifically Alibaba Group claims that Alibabacoin has infringed on the Alibaba trademark by using the trademark to raise capital through initial coin offerings. Alibaba Group presents a number of different press releases and social media posts as evidence of the trademark infringement. Specifically, Alibaba Group claims that Alibabacoin uses the Alibaba trademark to refer to Alibaba Group’s e-commerce offerings in a way that would lead consumers to believe that Alibabacoin is a subsidiary or affiliate company of Alibaba Group.  Alibaba Group also presents interviews with Alibabacoin’s founders which would lead consumers to believe that there is an association between the two companies.

Alibaba Group claims that there has been actual confusion in the market place because multiple news agencies have written articles which refer to Alibabacoin as a product of the Alibaba Group. This confusion is compounded by the fact that the founders of Alibabacoin do not attempt to correct the confusion when the founders are interviewed by news agencies.  Instead the founders of Alibabacoin allow news agencies to continue to refer to Alibabacoin merely as Alibaba.

Alibaba Group claims that Alibabacoin’s activity has caused their company harm and that unless Defendants are enjoined from their unlawful conduct, Alibaba Group Holding will continue to suffer irreparable harm for which it has no adequate remedy at law.

The judge in the case has been persuaded enough by Alibaba Group’s argument to issue a temporary restraining order against Alibabacoin.  A temporary retraining order is just the first step in a long and complicated case.  The case is not over yet, Alibabacoin will be given an opportunity to present evidence in its favor, but the evidence prevented so far seems to be overwhelmingly in favor of the Alibaba Group.

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