Estee Lauder sues NetEase Kaola for brand infringement

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Screenshots of MAC’s brand page on the NetEase Kaola website (Image credit: TechNode/Jill Shen).

Estee Lauder China is suing NetEase’s cross-border e-commerce platform, Kaola, for allegedly selling MAC brand cosmetics without authorization, the latest in a series of disputes the Chinese tech company is facing concerning product authenticity.

According to a filing released Friday on China Judgements Online (in Chinese), Estee Lauder China filed a lawsuit against NetEase in July 2017, saying Kaola used its MAC trademark without a license. The US cosmetics company demanded that Kaola halt selling, issue a public apology, and disclose its purchase channels. It also requested RMB 1 million (around $150,000 ) in compensation for losses.

The case is currently under trial by the First Intermediate People’s Court in the southwestern Chinese city of Chongqing. NetEase declined to comment when contacted by TechNode.

This is the second legal dispute between the two companies in the past year. NetEase was accused of selling fake Estee Lauder skin care products in an investigation launched by the state-backed China Consumers Association (CCA) in February 2018. However, NetEase denied the claim, saying the products sold on its platform were from “reliable overseas channels,” reported local media Huxiu (in Chinese). Estee Lauder China confirmed that the products were not authentic.

The Chinese internet giant later filed charges against CCA as well as the US-based cosmetics company for damaging its reputation, according to a filing released on Jun. 22. Beijing’s Haidian Court is still hearing the RMB 21 million case.

Kaola has faced accusations from consumers, as well. A Chinese customer with the surname Xian accused the company of selling a fake Canada Goose jacket to her in December. The investigation results were presented Friday in Hangzhou, with the Canadian company verifying the jacket as “authentic,”  Chinese media cited a regulatory official as saying.

Xian immediately responded on Weibo that she had yet to receive notice from officials, and that her rights were violated during the process. In a previous round of disputes in mid-January, NetEase announced it would send the jacket to one of the Canada Goose after-sales service agencies for verification. NetEase requested that Xian publicly apologize if the judgement supported the company, reported The Paper (in Chinese).