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Judge Dismisses Racketeering Charges in Alibaba Counterfeit Case

Alibaba Group got some good news Thursday.

The Chinese e-commerce company, currently duking it out in court against French luxury conglomerate Kering, won a small victory when a federal judge dismissed some of the claims.

Kering filed a lawsuit in May 2015 on behalf of its brands—including Gucci and Yves Saint Laurent—against Alibaba and 14 vendors selling counterfeit goods on its sites, alleging that the company promoted and profited from the sale of fake merchandise. The fashion house had previously sued Alibaba for the same thing in 2014 but dropped the case after only two weeks.

Last week, Judge Kevin Castel said Kering’s lawyers had failed to prove that Alibaba and its vendors had “joined together to form an enterprise in fact whose purpose is to sell and profit from the sale of counterfeit goods.”

According to Castel, “The fraud perpetrated by each merchant defendant could be accomplished without any assistance from any other merchant defendant.”

His decision did not affect the other claims against Alibaba, however.

The company, which said it sold a whopping $462 billion worth of goods last year, has had a tough time convincing luxury companies that it’s against the sale of fakes. After being booted out of the International AntiCounterfeiting Coalition (IACC) after only a month as a member in May, Alibaba introduced the IP Joint-Force System in July—an online platform designed to help track and remove copyright-infringing goods on its marketplaces.

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