A New York judge has decided that Alibaba, a major Chinese e-commerce firm, must face litigation brought by an American toy manufacturer. The lawsuit accuses Alibaba of allowing its online platforms to be used for selling fake Squishmallows, a popular plush toy.
The judge in question, Jesse Furman of the Southern District Court of New York, rejected Alibaba’s plea to dismiss the lawsuit lodged by Kelly Toys Holdings. Kelly Toys, the creator of these sought-after plush toys, is a subsidiary of Jazwares, which in turn is part of Alleghany Corp. This parent company falls under the umbrella of Warren Buffett’s Berkshire Hathaway.
Alibaba, China’s largest e-commerce company, did not immediately respond to the ruling. The company had requested the case’s dismissal partly on the grounds that it was incorrectly named in the lawsuit as Alibaba.com, not its official corporate name.
According to the lawsuit filed by Kelly Toys, even after previous legal actions demanding a halt, counterfeit Squishmallows continued to be sold by vendors on Alibaba’s websites. The company had previously initiated legal action to prevent approximately 90 e-commerce entities from marketing fake versions of the toys, with Alibaba being added as a defendant in March.
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Judge Furman, in his ruling, noted that despite being aware of the issue, Alibaba’s platforms still featured infringing listings, some of which were by the merchant defendants. Furman found the allegations credible enough to deny the motion to dismiss them.
