02.10.2006

Trademark News

Falsified Luxury Goods on ebay
LVMH sue Auction Site

The worldwide-largest luxury-goods concern LVMH Moet Hennessey – Louis Vuitton are proceeding legally against ebay. The online auction house does not do enough to prevent the sale of counterfeits. Ebay has recently received a summons to appear before the Paris Business Court.

LVMH are contesting the legal dispute over its two largest brands.  With respect to the label ‘Dior Couture’,  the luxury goods manufacturer is demanding 17 million euros damages,  for the brand ‘Louis Vuitton’ the group wants to receive 20 million euros. LVHM told the newspaper ‘Le Monde’ that in the second third of this year alone, about 300,000 advertisements for Dior products and 150,000 for Vuitton bags were inserted on ebay. In 90% of  these cases the goods were found to be false.

Ebay representative Esther Ohayon points to the strict procedures against brand piracy: ‘We pull off articles which are clearly to do with counterfeiting and call upon members to tell us about copies’. Additionally, the ‘VeRO’ (verified rights owners)  program allows trademark holders to notify ebay  in the case of uncovered counterfeits  and to end the auction. LVMH are not convinced by ebay’s measures at all. The company accuses the auction house  of not systematically following up warnings of counterfeits. The largest ebay sellers, those from which ebay also earns the most money, often remain untouched because they are good customers for ebay.  LVMH are receiving support from French  trading association Unifab who have already criticized the insufficient procedures against counterfeits  and have been threatening legal steps.

The legal action will deal with the fundamental question  of who is responsible for the counterfeits placed on ebay. The auction house puts forward their view  that it is the traders themselves who must be pulled before the law. ebay merely brings together sellers and buyers in a worldwide spanning net and can not be expected  to guarantee the authenticity of the products.

For LVMH, the difficulty will be to prove that ebay is more than just a middleman. The concern is hoping that the judgement this year in the case of Louis Vuitton  against Google will provide the right direction. A French Appeal Court had condemned Google to pay damages because they had published adverts for falsified products. By displaying the adverts, Google had engaged in unfair competition and infringed trademark rights, it had said in the judgement.
 
rmb / juk

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