Squishmallow maker Kelly Toys, backed by billionaire Warren Buffett's Berkshire Hathaway, has scored a victory in their fight against counterfeit versions of the popular plush toys on Alibaba's online platforms. A US judge rejected Alibaba's attempt to dismiss the lawsuit, setting the stage for a potential trial on the matter.

• US judge rejects Alibaba's dismissal motion in Squishmallow copyright and trademark infringement lawsuit.
• Kelly Toys accuses Alibaba of turning a blind eye to counterfeits, even rewarding some infringing sellers with prestigious badges.
• This lawsuit marks the seventh for Kelly Toys against Alibaba regarding Squishmallow knockoffs.

Counterfeit Squishmallows Flood the Market: Kelly Toys, owned by Jazwares (a Berkshire Hathaway subsidiary), claims Alibaba has failed to adequately address the widespread sale of counterfeit Squishmallows on its platforms. Despite six prior lawsuits and Alibaba's own "three-strike" policy against infringing sellers, Kelly Toys alleges that counterfeits continue to thrive, with some infringers even receiving "Gold Supplier" and "Verified" status.

Alibaba Defends Its Platform: Alibaba maintains its innocence, arguing that Kelly Toys has not provided evidence of direct involvement and that their proposed measures are overly burdensome. The company claims it already employs strong anti-counterfeiting measures and rejects accusations of ignoring the issue.

Next Steps: The judge's decision allows the lawsuit to proceed, with the possibility of a future trial to determine Alibaba's liability. The outcome of this case could have significant implications for online marketplaces and intellectual property rights.