US Court Rules Alibaba Powerless to Stop Cryptocurrency Using Its Name

A U.S. District Court has ruled against Chinese conglomerate Alibaba Group in favor of a Dubai-based cryptocurrency foundation, Alibabacoin. The judge says Alibaba Group did not show any jurisdiction in the U.S. and China’s ban on initial coin offerings eliminates any potential confusion.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

No Jurisdiction for Alibaba

U.S. District Judge J. Paul Oetken ruled in favor of a cryptocurrency and its foundation on Monday against the Chinese giant Alibaba Group Holdings. He “rejected Alibaba Group Holdings Ltd’s bid for a preliminary injunction to block the Dubai cryptocurrency firm Alibabacoin Foundation from using the Alibaba name,” Reuters elaborated, adding that he explained:

Alibaba did not show he had jurisdiction, having failed to establish a ‘reasonable probability’ that Alibabacoin’s interactive websites were used to transact business with customers in New York.

In a complaint filed with the U.S District Court of Southern District of New York on April 2, Alibaba Group accuses the defendants of using an “unlawful scheme to misappropriate” Alibaba’s brand name “in order to deceive investors in the U.S. and around the world.” The defendants used the Alibaba trademark to raise over $3.5 million from investors through initial coin offerings (ICOs) of Alibabacoins or Abbc Coins which “are neither registered nor approved by U.S. Regulators,” the Chinese company alleged.

The Alibabacoin Foundation argued that it was not trying to piggyback off the Alibaba name. Judge Oetken then dissolved a temporary restraining order against the foundation issued on April 2 by another judge.

This Is Not China

The court document shows that Alibaba Group Holding is a Cayman Islands company with its principal place of business in Hangzhou, China. Alibaba Foundation is a Dubai-based commercial organization with offices in Dubai and Minsk, Belarus. It is also known as the Alibabacoin Foundation and Abbc Foundation.

“The judge said it did not matter that Alibabacoin might eventually list its cryptocurrency on U.S. exchanges or that a New York company hosted one of its websites,” Reuters detailed, noting that:

Any injury Alibaba might have suffered to its business, goodwill and reputation from alleged trademark infringement likely occurred in China, where the e-commerce retailer is based.

Furthermore, the judge explained that “China’s ban on initial coin offerings in September eliminated a key source of potential confusion among consumers about its lack of ties to Alibaba,” the news outlet conveyed.

Do you think Alibaba should be able to stop Alibabacoin? Let us know in the comments section below.

Images courtesy of Shutterstock and Alibaba Group Holdings.

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